CBA has informed the Australian Securities and Investment Commission (Asic) that it has written to 3,500 customers of five advisers informing them that the advice they received is being reviewed.
The bank said they are expecting to pay these customers approximately A$1.9m for losses they suffered due to inappropriate advice. Additionally, it said the compensation figure is likely to increase as the bank continues to conclude the customer reviews.
Forensic accountants have been trawling through the CBA’s records since 2014 when Asic introduced stringent licensing requirements.
In November 2017, the accountants identified 16 potentially high-risk advisers and ordered the CBA to review the advice they gave. From this, five were determined to have given advice that caused customers to suffer loses.
Asic said the current round of compensation is in addition to A$4.97m the CBA paid in 2016 to customers who were given inappropriate advice from another group of advisers.
The watchdog has been cracking down on Australia’s biggest banks in recent years as it uncovered “systematic failures” that had allowed wealth managers to take advantage of automatic deductions from customers.