Commonwealth Bank of Australia (ASX: CBA) has been under the spotlight due to Royal Commission.
The bank has just received a good piece of news from services firm Ernst & Young (EY), which was tasked with looking at Commonwealth’s Financial Planning (CFP) business regarding the fees for no service scandal.
What the EY Report looked at:
EY was tasked to consider whether CFP had taken reasonable steps to ensure compensation was given to customers who were entitled to it between July 2015 and January 2018.
The other aspect of the report was if CFP had put in place systems, processes and controls to meet contractual obligations for customers still paying ongoing service fees.
And EY Said…
The report came back saying that there was no evidence CFP didn’t take reasonable steps to give customers remediation for the periods of July 2015 to May 2016, and between 5 June 2017 and 31 January 2018. CFP seems to have passed the test here.
For 1 June 2016 to 4 June 2017, “further work by CFP was required.” However, EY said CFP was in the process of taking reasonable steps.
In regard to the controls, EY said there was “nothing to suggest those systems…are not reasonably adequate to ensure that CFP is able to discharge its obligations to customers.
However, EY did suggest that CFP could improve because it had a high level of manual processes, it had a low level of control awareness in the business and there were limitations to report and analyse information centrally.
EY will judge whether CFP has addressed its findings and ASIC requires a detailed plan of the actions CFP will take to follow the recommendations.
The Commonwealth Bank share price is down 0.1% in early trade.
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