Commonwealth Bank chairman David Turner has moved to reassure shareholders that the bank is “putting things right” with clients who have been provided inappropriate financial advice.
Speaking at CBA’s 2016 annual general meeting yesterday, Mr Turner said that past failings in the bank’s advice business have brought a “considerable amount of scrutiny”.
ASIC found thousands of instances where customers of AMP, ANZ, CBA, NAB and Westpac advice groups were being charged a fee for ongoing financial advice services they never received, ASIC announced last month.
According to the regulator’s report, CBA will be expected to pay more than half of the $178 million compensation total that ASIC estimates was wrongfully charged to all bank customers.
Mr Turner said this issue was one that the bank had identified through its own review and reported to ASIC in 2014.
“Since then, we have been working with the regulator to set up the right process to refund any customers who didn’t receive advice for their money,” he said.
“We will work hard and diligently through this issue and we expect to have the refunds, plus interest, completed by mid-2017. Since we discovered the problem we have provided for this in our accounts and refunds have already commenced.”
Mr Turner added that its other client compensation scheme, the Open Advice Review program – slated to wrap up by the end of the year – found that 80 per cent of the cases involved appropriate advice.
“These have been tough and complex issues to deal with, but what matters is we ensure where we have not done the right thing by customers, we work to put things right as well as we possibly can,” he said.
“The executive leadership team have worked hard to ensure they find all these past problems and work to put them right.”
Mr Turner will step down as chair next month, with Catherine Livingstone set to take over.
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