Commonwealth Bank’s bill for bad advice grows to $23m
THE Commonwealth Bank has revealed $23 million will be paid out to customers who received bad advice from staff at the centre of the bank’s financial planning scandal.
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THE Commonwealth Bank has revealed $23 million will be paid out to customers who received bad advice from staff at the centre of the bank’s financial planning scandal.
It comes as chief executive Ian Narev prepares to face politicians next month for the next review into the major banks by the federal Parliament’s Standing Committee on Economics.
More than 8600 customers who received advice from financial planners involved in the scandal registered for the bank’s review program.
In an update on the review on Tuesday, the bank said it had now offered about $23 million in compensation, including interest.
Of the customers who registered, fewer than 20 per cent — or 1700 — will receive compensation, Business Daily believes.
The inquiry is believed to have found more than 80 per cent received “appropriate” advice.
Promontory Financial, the financial services consulting arm of IBM, was commissioned by the bank to carry out the Open Advice Review Program.
It covers customers who received advice between September 2003 to July 2012 from the bank’s Commonwealth Financial Planning and Financial Wisdom operations and requested a review. The tallies for the amount to be paid out and the number of customers who will receive compensation are to be formally revealed in a final report due on March 31.
The Promontory inquiry followed another remediation program where $52 million was paid to about 1100 CBA customers.
Leif Gamertsfelder, the CBA executive general manager overseeing the program, said the update yesterday was “another step towards our goal of putting things right for customers who received poor advice in the past”.
Separately yesterday, Commonwealth Bank subsidiary Bankwest announced it would no longer accept applications from would-be customers who wanted to refinance investment property loans from other banks.
Shares in the CBA closed down 0.5 per cent on Tuesday at $81.51.
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