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CBA Advice Review

Photo: James Alcock (http://www.smh.com.au/business/cba-chief-ian-narev-on-notice-over-compensation)

Photo: James Alcock (http://www.smh.com.au/business/cba-chief-ian-narev-on-notice-over-compensation)

On 3 July 2014, Ian Narev, the Chief Executive Officer for Commonwealth Bank, addressed a press conference to respond to the Senate Inquiry’s report on CBA financial planning scandal.  The scathing report was issued on 26 June 2014 after months of investigation and relentless coverage so the fact that it took a week for CBA to respond is, in itself, telling.

Click here to access the Senate report. And for a high level review of the more interesting aspectsread “Wading in the shallows: Advice, ASIC and Accountability”.

Mr Narev provided a superficial and perhaps unconvincing response to the report and at the heart of the CBA’s considered response was his proposal to commence a CBA-run review of all financial advice provided by CFP and Financial Wisdom over a 10-year period.

The public and media response to this proposal has been other than what Mr Narev might have anticipated. Industry insiders and affected clients remain skeptical of CBAs ability to properly review their own advice.

And for good reason.

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Photo Credit: mtlchiconline

Photo Credit: mtlchiconline

Noel Stevens was dying when CommInsure rejected his insurance claim.  The NSW District Court ruled the insurer was right to turn down the claim.

Mr Stevens passed away, but not before taking Commonwealth Financial Planning to court as he believed he had been given bad insurance advice. The court agreed.

Commonwealth Financial Planning (CFP) appealed the ruling and recently lost when defended by Noel Stevens’ daughter (CFP v Couper). The evidence in this case showed it’s possible to receive insurance advice that leaves you uninsured, where you were previously covered.

This client had no idea his insurance advice was poor. The CFP advisor didn’t know he’d given the wrong advice. In fact, the advisor followed a process you could find in any bank across Australia.

When your advisor is none the wiser, how can you check you have received proper advice?

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