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Advice for CBA and Macquarie customers

in Financial Negligence by Ben Hardwick on

Slater and Gordon is investigating compensation claims on behalf of investors who received financial advice from Commonwealth Financial Planning, Financial Wisdom and Macquarie Private Wealth following reports of serious deficiencies and misconduct in respect of the financial advice provided to customers. 

In response to involvement from ASIC, both the CBA and Macquarie Bank have initiated programs for the review of the financial advice provided to customers.  Both banks have offered to meet the cost of clients obtaining independent legal advice about any offers of compensation made to persons arising out of either review program.

Commonwealth Bank of Australia - Open Advice Review Program

The CBA Open Advice Review Program (OAR) is open to customers who received advice from Commonwealth Financial Planning (CFP) and Financial Wisdom (FW) between 1 September 2003 and 1 July 2012 and who are minded to have the advice they received reviewed and assessed.  

On 2 November 2014, Slater and Gordon was appointed by the CBA to act as an Independent Customer Advocate as part of the OAR Program. Slater and Gordon is one of three firms that have been appointed to act in this capacity.

The cost of obtaining independent legal advice in the OAR Program will be met by the CBA.

Macquarie Client Review Program

In January 2013, Macquarie and ASIC agreed to an Enforceable Undertaking which requires Macquarie to undertake a remediation process for clients who received deficient financial advice. The Enforceable Undertaking followed an extensive ASIC investigation into Macquarie’s financial product advice business which revealed a series of serious deficiencies including:

  • client files not containing statements of advice;
  • advisers failing to demonstrate a reasonable basis for advice provided to the client; and
  • poor client records and lack of detail contained in advice documents.

On 13 August 2014, Macquarie wrote to around 160,000 its past and current customers advising customers that they can request a review of the advice received (the Client Review Process).  Customers who received this letter, are eligible to have their file reviewed. 

A summary of the review process can be found here. As outlined in the summary, the process allows customers to be reimbursed up to $5,000 for professional advice (including legal advice) to consider the outcome of Macquarie’s review of the advice received. 

How Slater and Gordon can help

Slater and Gordon has Australia’s premier financial services negligence litigation team. We regularly commence proceedings against financial advisors and stock brokers on behalf of our clients.

Slater and Gordon is providing assistance to CBA and Macquarie customers who wish to have their file reviewed by those banks. Customers may contact us to discuss participation in either review program free of charge, and on a ‘no obligation’ basis.

We strongly recommend that participants in either review program obtain independent advice about the adequacy (or otherwise) of any compensation offer received.  We expect that any compensation offer will be made on the basis that any claim is settled fully and finally.  It is therefore critical that participants are in a position to make an informed decision about whether to accept the amount of compensation offered and whether the offer represents ‘fair value’ for their claim.

Limitations Periods

It is timely for professional advisors to reflect on any potential claims their clients may have arising out of losses suffered during the Global Financial Crisis, which may imminently become statute barred.  We recommend that clients obtain advice regarding any potential claims as soon as possible so as to ensure that preventative action can be taken to prevent the claim from expiring.

Strict time limitations apply to most legal claims. If claims are not commenced in Court before the applicable time limit expires, the right to pursue the claim will be permanently lost. For legal claims relating to a breach of contract, claims must be brought within 6 years of the breach.  For negligence claims, claims must be brought within 6 years of the date on which the claimant first suffers loss as a result of the negligent advice. 

Ben Hardwick and Ben Whitwell are commercial litigation lawyers.

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