The Commonwealth Bank wins the gold medal for charging customers fees for financial advice they never received, the banking royal commission has heard.
Australia’s largest bank has charged more fees for no service than other other financial services entity in the country, counsel assisting the royal commission Mark Costello said.
‘It would be the gold medallist if ASIC was handing out medals for fees for no service, wouldn’t it,’ the barrister asked on Wednesday.
Linda Elkins, the executive general manager of the bank’s wealth management arm Colonial First State, replied ‘yes’.
Commonwealth Bank has refunded $118.5 million to customers who were charged fees for advice they did not receive.
That’s more than half the $219 million compensation paid by the big four banks and Australia’s largest wealth manager AMP over the last decade to more than 310,000 financial advice customers charged fees for no service.
Clients of CBA’s Commonwealth Financial Planning, BW Financial Planning and Count Financial businesses were charged ongoing fees for financial advice where no advice services were provided, mainly during the period July 2007 to June 2015.
Mr Costello questioned whether Colonial First State had taken any action over fees deducted from client accounts it managed where no advice service was provided by the CBA entities.
Ms Elkins said Colonial was satisfied with the investigations and remediation undertaken by the advice businesses and CBA.
‘I can certainly assure you, as the product issuer, I was very unhappy with what was happening, but I did believe that allowing Commonwealth Financial Planning to investigate and carry out their remediation was going to get the best outcome for customers,’ she told the commission.
Ahead of this week’s royal commission hearing, CBA and the Australian Securities and Investments Commission announced an agreement over an advice refund program involving two bank subsidiaries.
Commonwealth Financial Planning and the now-closed BW Financial Advice have paid $88.6 million in compensation to 31,500 customers who did not receive an annual review as part of their financial advice service package.
CBA CEO Matt Comyn on Friday apologised for the bank failing customers in its advice businesses over the past decade, saying it was unacceptable.