ASIC, the corporate watchdog, has sent in the private group KordaMentha Forensic to investigate two of the Commonwealth Bank’s financial planning arms accused of poor advice and misconduct.
KordaMentha Forensic will review past activities by Commonwealth Financial Planning and Financial Wisdom Limited to identify high-risk advisers and affected customers, and compliance with the new conditions.
ASIC (Australian Securities and Investments Commission) imposed conditions on Commonwealth’s financial planning businesses after a scheme developed to compensate customers was not applied consistently and disadvantaged some customers.
ASIC has required the the bank offer up to $5,000 to customers to have their financial advice independently reviewed.
The bank has already paid $52 million in compensation to more than 1,100 customers of specific advisers who were identified as having provided poor advice.
Currently the bank is running another program where anyone who received advice between September 2003 and July 2012 will be able to get an assessment of any advice received from the Commonwealth.
The bank has written to 300,000 customers giving details of a compensation program. More than 4,200 people have registered for their advice to be reviewed.
Ian Narev, CEO of the Commonwealth Bank, has apologised to customers who lost money as a result of poor practices of financial planners.
The bank has been under pressure since a Senate inquiry report criticised the the bank over its responses to claims of fraud and misconduct by some Commonwealth financial planners.