Commonwealth Bank, one of Australia’s major banks, will refund unauthorised advice fees charged to dead customers and rebate all grandfathered commissions charged to clients of Commonwealth Financial Planning.
The move comes after the royal commission’s findings of “inappropriate advice” and “fee for no service” across the country’s financial sector.
The bank has audited 142,000 accounts, and so far identified 12 deceased estates being charged unauthorised fees between April and June 2018.
As part of its “remediation program”, CBA will scrap “certain fees on legacy wealth products” from January 2019, which it said will save customers A$25m annually.
CBA Wealth Management chief operating officer Michael Venter said the changes are part of the reform process for its wealth managed businesses.
“Charging unauthorised advice fees to deceased estates is unacceptable. A broader review of deceased estates is underway across our advice licensees. It will go back seven years to ensure that any instances where unauthorised fees have been charged are identified and refunded with interest,” said Venter.
“Work is ongoing, however an initial search of 142,000 accounts identified 12 deceased estates being charged unauthorised advice fees between April and June 2018.”
Venter said CBA also supports the “removal of grandfathered commissions from superannuation and investment products across the wider industry” and believes a legislative approach should be considered.
CBA said it has now spent about A$580m improving its advice business in the last six years, including A$270m in remediation for poor advice and wrongfully charged fees.
Australia’s “big four” banks have been in “damage control” mode since the royal commission began and their share prices have tumbled.
Earlier this week, ANZ said it was expecting a A$374m hit to its full-year profit in the wake of scandals made public by the royal commission.