The Australian bank announced further action to deal with a saga surrounding poor advice given to wealth management clients.

Commonwealth Bank, which has appointed a retired High Court judge in Australia to chair a programme helping clients receiving poor advice, has changed licence conditions in parts of its business.

The firm said last Friday it finalised variations to the Australian Financial Services Licence conditions for Commonwealth Financial Planning Limited and Financial Wisdom Limited. The changes were as agreed with the Australian Securities and Investments Commission, the regulator.

The changes from how, on 16 May, Commonwealth Bank said it had agreed with ASIC to contact more than 4,000 customers to inform them the advice they had previously received was subject to an internal review because their advisor had given some clients poor advice. The firm also agreed to offer these customers the support of a qualified advisor (such as lawyer, accountant or financial advisor) to seek independent advice in relation to that review, with fees up to $5,000 being met by the bank.

These conditions have now been finalised and will now commence, the bank said.

Putting the varied licence conditions in place makes sure that all relevant customers are treated consistently, the bank said.

“CFPL is now a significantly transformed business. It has undergone structural, cultural and management changes, with robust systems and processes in place for the supervision and monitoring of advisors. The supervision and monitoring framework has also been applied to FWL,” it continued.

To see a recent story about the whole advice episode at the bank, click here.

Promotory

Separately, the bank announced it has named Promontory Financial Group as the independent expert for the open advice review programme.

Dr Jeff Carmichael AO, who is chief executive of Promontory Financial Australasia, will lead the global Independent expert team. Carmichael was the inaugural chairman of APRA and a member of the Wallis Inquiry into the Australian financial system. He had a 20-year career with the Reserve Bank of Australia, served for seven years as Professor of finance at Bond University and was formerly Chairman of the Australian Financial Institutions Commission and the Queensland Office of Financial Supervision.

Other Promontory executives involved in the assignment include Eugene Ludwig, CEO and founder of Promontory Financial Group, and Mary Schapiro who is currently the vice chair of Promontory’s Advisory Board. Ludwig served under President Clinton as US Comptroller of the Currency. Schapiro served as the 29th chair of the US Securities and Exchange Commission from 2009 – 2012, and oversaw the implementation of comprehensive new financial regulations, aimed to improve protections for investors.

Ian Narev, CEO of the bank, said the programme will give support and comfort to those who want their advice reviewed.