No one listening?
The Commonwealth Bank yesterday promised “further action to improve its wealth businesses” and the shares fell to a near four-month low of $68.67, before finishing down 0.8% for the day at $68.75.
The statement, issued yesterday morning promised that the bank would be:
- Looking for, and refunding, fees charged to deceased estates
- Removing fees on some legacy wealth products, which will save customers $25 million.
- Rebating grandfathered commissions to Commonwealth Financial Planning customers, which will benefit 50,000 accounts by about $400 a year.
- Giving all Commonwealth Financial Planning customers a chance to renew their ongoing service arrangements every two years.
The rebating of grandfathered commissions will cost the bank around $20 million.
“Charging unauthorised advice fees to deceased estates is unacceptable,” CBA’s wealth management chief operating officer, Michael Venter, said in the announcement.
“A broader review of deceased estates is underway across our advice licencees. It will go back seven years to ensure that any instances where unauthorised fees have been charged are identified and refunded with interest.”
Work is ongoing, however, an initial search of 142,000 accounts identified 12 deceased estates being charged unauthorised advice fees between April and June 2018.
“We support the removal of grandfathered commissions from superannuation and investment products across the wider industry and believe a legislative approach should be considered,” said Mr Venter.
“Over the past six years, the Commonwealth Bank has spent approximately $580 million improving its advice business processes, administering and assuring advice remediation and implementing its Future Advice Model.
“Through its Open Advice and Service Delivery Reviews, and other programs, Commonwealth Bank has also paid approximately $270 million in compensation (including interest) to customers who were provided with poor quality advice or charged fees where service was not provided,’ the bank boasted.
The bank’s statement came a day after the ANZ revealed more than $400 million in payments to customers resulting from problems that emerged from the Hayne royal commission, plus millions of dollars in legal charges. Westpac last month revealed a hit to profit of around $235 million for the year to the end of September.
