“We are truly sorry,” said Commonwealth Bank CEO Ian Narev as he spoke to a press conference to explain what he’s doing to help customers who’ve lost money through poor advice from the bank’s financial planners.
Many would be asking, he said, why the bank was only taking action now.
He said: “Even well advised people who had the right financial advice lost significant money from their investments (during the complicated times of the GFC).”
The bank had realised that people felt powerless when dealing with a big institution such as the bank. “They feel that it’s hard to be heard,” Narev said.
Narev announced a new compensation scheme for victims of the financial planning scandal. The program will provide an assessment of the financial advice and will give those affected access to an independent advocate and an independent review panel.
The details of the program were being worked out and should be up and running mid-August. Staff were being appointed now and the program could be scaled up to meet demand.
“It’s never too late to do the right thing,” he said.
The bank had done some compensation modelling but would not disclose estimates “We’re confident that won’t be material from a shareholder perspective,” Narev said.
However, it was possible the bank would learn of new instances of customers being treated unfairly.
Commonwealth Financial Planning and Financial Wisdom have about 400,00 customers.
Narev acknowledged the bank’s difficult position.
“You’d be staggered at the amount of people who are trying to have a go at the Commonwealth Bank.”
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