The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry was established
on 14 December 2017, is due to hand down an interim report no later than 30
September 2018 followed by a final report by 1 February 2019.
As of 13 April 2018 the royal commission has received 3,433
public submissions - 69%
of these were Banking, 8% Superannuation 8% and 7% Financial Advice.
Round 2 public hearings finish on 27 April 2018.
Yesterday was the Commonwealth Bank of Australia's turn to reluctantly admit systemic fraud ....
The Guardian, 18 April 2018:
Counsel assisting the
royal commission, Mark Costello, asked Linda Elkins, from CBA’s wealth
management arm Colonial First State, to confirm CBA’s poor record of charging fees
for no service.
“It would be the gold
medallist if [the corporate regulator] was handing out medals for fees for no
service, wouldn’t it?” Costello asked.
Elkins replied: “Yes.”
The commission was told
that from July 2007 to June 2015 clients of CBA’s Commonwealth Financial
Planning, BW Financial Planning and Count Financial businesses were routinely
charged ongoing fees for financial advice where no advice services were
provided.
CBA has had to refund
$118.5m to customers – more than half the $219m in compensation paid by the big
four banks and AMP over the past decade – to more than 310,000 financial advice
customers.
ABC News, 18 April 2018:
Michael Hodge QC
observes that Commonwealth Financial Planning has had a 100 per cent
increase in clients over the past decade but a 25 per cent drop in the number
of advisers.
He asks CBA's Marianne
Perkovic whether the bank had any concerns that clients were not receiving
adequate attention because of the decline in advisers, while client numbers
doubled.
This is in the context
of ASIC's concern that some firms were taking on too many clients for the
number of planners.
Ms Perkovic struggles to
provide a clear answer.......
After disputing the
meaning to be attributed to internal memos between the bank's senior managers
in early 2012, Ms Perkovic eventually had to admit that a Deloitte report
handed to CBA in July 2012 revealed systemic problems in ensuring that
customers weren't being charged for financial advice they did not receive.
Deloitte had found that
at least $700,000 in ongoing service fees were being charged to more than 1,050
clients that were allocated to more than 50 inactive financial planners
who had left the business before 2012.
It appears that Ms
Perkovic was finally ground down by relentless questioning from Michael Hodge
QC, warnings from Commissioner Kenneth Hayne and the irrefutable evidence of
the Deloitte report.
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