The conditions applied by ASIC have led to a total of $9.3 million in additional customer compensation.
The licence conditions were announced several months after former chief executive Ian Narev announced the open advice review program. The OARP, billed as the largest program of its kind, was a review of the past 10 years of advice provided by the bank’s advisers.
The OARP would repay customers a total of $29 million when the program closed in 2017. The issue of poor or inappropriate advice would, however, be dwarfed by the scale of the payments to customers for the fees-for-no-service scandal.
CBA was described as a “gold medallist” in fees for no service by the Hayne commission and ASIC’s most recent review forecasts the bank will repay customers $143 million.
KordaMentha’s reviews would further identify a sub-set of advisers who were responsible for the lions’ share of the compensation. These five advisers – code-named Adviser 30, Adviser 52, Adviser 72, Adviser 91 and Adviser 107 – were responsible for a collective $2.2 million in repayments.
Adviser 72 and Adviser 107 were among the standouts in this rogues’ gallery of bad financial advisers. Adviser 72 had 511 clients. Seventy-one were found to have reviewed poor financial advice and were collectively compensated $655,619.
Adviser 107 did relatively less damage but had a worse strike rate. Of just 136 clients, 32 were found to have received poor advice and were compensated $245,004 together. The average compensation offered per case was $19,150.
The licence conditions imposed by ASIC are yet to be lifted and will remain until the CBA board writes to the regulator to say the conditions have been met. KordaMentha says this item has been added to the agenda of CBA’s next board meeting.