A New South Wales-based Commonwealth Bank adviser charged a client who died in 2004 for financial advice for more than a decade following her death, the Financial Services Royal Commission has heard.
The planner worked for the Commonwealth subsidiary Count Financial and the fees continued until 2015, even though he knew his client was dead.
An internal CBA report from December 2015, titled Count Risk & Compliance Forum, was handed to the royal commission today, detailing how several financial advisers charged customers for services they didn’t receive, including instances of charging dead people for advice.
The report found one adviser never provided any customers with advice, and even charged a client six months after they had died. He was forced to repay the fee to the dead person’s children.
Commonwealth Private executive GM Marianne Perkovic conceded under questioning that the report found at least three Count Financial advisers had charged ongoing fees to dead people. It is her second day in the witness box.
Yesterday, Royal Commissioner Kenneth Hayne warned Perkovic three times, “for her own safety”, to answer the questions put to her.
Perkovic worked at Count before joining the Commonwealth in 2010. CBA bought the financial planning business the following year.
The fees charged by CBA have been the focus of the royal commission into misconduct in banking and financial services for the last two days.
Senior counsel assisting the commission Michael Hodge also detailed a case where a client who died in 2007 was charged fees over six years and his widow was only contacted in 2013.
Hodge told the commission that the adviser who charged a dead client fees for more than a decade said when asked about it that “he said he didn’t know what to do, had tried to contact the public trustee and not heard back”.
That planner also gave advice to self-managed super fund clients without having the proper accreditation to do so.
The review into his actions recommended he get the accreditation.
Hodge asked Perkovic how many advisers would need to fail in their duties “before it was considered a systemic issue?”
“It would need to be determined through the significant breach panel,” she said.
Hodge also Perkovic if ASIC had been put on a “drip feed” of information when notifying the regulator about compliance problems in a bid to minimise the issue.
“As we found issues, we reported them to ASIC,” Perkovic said.
Two years passed before CBA passed on a 2012 Deloitte report into the lack of systems to monitor fees and breaches to ASIC in August 2014.
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