The Commonwealth Bank has offered just under $1 million in compensation to clients who have received bad advice, with close to $500,000 having been paid out already.
Promontory Financial Group released its third report on CBA’s Open Advice Review (OAR) yesterday, covering the period between 30 April 2015 and 31 August 2015.
The bank’s advice review has been created to compensate clients who may have received poor advice from CBA dealer groups Commonwealth Financial Planning and Financial Wisdom between 1 September 2003 and 1 July 2012.
As at 31 August 2015, 8,835 cases of potentially poor advice had been registered, of which 1,285 progressed to the ‘assessment stage’ and 686 were issued with an assessment outcome.
Of those 686 customers, 19 accepted the bank's assessment outcome and offer of compensation – resulting in CBA paying $488,815 in compensation.
191 customers accepted CBA’s assessment outcomes (with no offer of compensation); 63 customers rejected or did not respond to CBA’s assessment outcome, and subsequently withdrew from the program; and 63 customers rejected the bank’s assessment outcome and made a counter-offer to CBA.
350 customers are still reviewing the bank’s assessment outcome.
According to Promontory, as at 31 August CBA had offered compensation to 53 of the 686 cases where an assessment outcome had been issued – totalling $950,252.
The report also revealed that CBA recruited more than an additional 100 full-time equivalent ‘resources’ to its advice review program between 30 April 2015 and 31 August 2015.
As at 24 August 2015, the equivalent of 613 full-time staff were working on the Open Advice Review program.