Commonwealth Bank of Australia CEO apologies for financial planning scandal
Thursday, July 3, 2014
Ian Narev, the CEO of the Commonwealth Bank of Australia, this morning "unreservedly" apologised to clients who lost money in a scandal involving the bank's financial planning services arm.
Last week, a Senate enquiry found financial advisers from the Commonwealth Bank had made high-risk investments of clients' money without the clients' permission, resulting in hundreds of millions of dollars lost. The Senate enquiry called for a Royal Commission into the bank, and the Australian Securities and Investments Commission (ASIC).
Mr Narev stated the bank's performance in providing financial advice was "unacceptable", and the bank was launching a scheme to compensate clients who lost money due to the planners' actions.
In a statement Mr Narev said, "Poor advice provided by some of our advisers between 2003 and 2012 caused financial loss and distress and I am truly sorry for that. [...] There have been changes in management, structure and culture. We have also invested in new systems, implemented new processes, enhanced adviser supervision and improved training."
An investigation by Fairfax Media instigated the Senate inquiry into the Commonwealth Bank's financial planning division and ASIC.
Whistleblower Jeff Morris, who reported the misconduct of the bank to ASIC six years ago, said in an article for The Sydney Morning Herald that neither the bank nor ASIC should be in control of the compensation program.
- Adele Ferguson and Ben Butler. "CBA announces new compensation scheme for financial planning victims" — The Sydney Morning Herald, July 3, 2014
- Michael Janda. "Commonwealth Bank boss Ian Narev says sorry for multi-million-dollar financial planning scandal" — ABC Online, July 3, 2014
- Jeff Morris. "Six years later, CBA boss Ian Narev talks to whistleblower Jeff Morris" — The Sydney Morning Herald, July 3, 2014
- Adele Ferguson and Deb Masters. "Banking Bad" — ABC Online, May 6, 2014