Dead clients charged

Banks grilled at Royal Commission

SOME Commonwealth Bank financial advisers kept charging clients fees after they died, in one case for more than a decade, a royal commission has heard.

One Count Financial planner knew his client had died in January 2004 but was still reaping almost $1000 a year in fees in December at 2015.

“When asked he said he didn’t know what to do and he had tried to contact the public trustee and had not heard back,” a Count Financial document noted.

The recommended action included refunding the fees to the client’s estate and a possible warning for the adviser.

The 2015 investigation revealed other examples of dead clients among broader cases of Count Financial planners charging fees for advice services customers never received.

The document noted one adviser was not providing ongoing services to clients, including charging a dead client for six years.

In that case, the customer died in 2007 and contact was made with the client’s wife in 2013 but no action was taken.

Count’s investigation found another adviser in its network had provided no advice to any client but was receiving ongoing service fees, including for someone who died March 2015.

The Commonwealth Bank has been dubbed the “gold medallist” of the “fees for no service” problems across Australia’s big four banks and largest wealth manager AMP.

CBA has refunded $118.5 million to customers of its Commonwealth Financial Planning, Count Financial and the now-closed BW Financial Advice businesses who were charged fees for no service, mainly between July 2007 and June 2015.

Senior CBA executive Marianne Perkovic, who had overall responsibility for its in financial advice businesses from 2012 to 2016, said the bank apologised for the customer complaints.

Westpac was also grilled by the commission yesterday and admitted a senior financial planner gave poor advice to a couple that cost them their dream retirement.

Jacqueline McDowall and her husband ended up losing their home after trying to use superannuation funds to buy a bed and breakfast.

Ms McDowall said she had been “led up the garden path”.

“I just feel through this horrible situation through the Westpac bank, the advice that 1 Be sorry for originally really

upsetting everyone 2 Return sections for a belt 3 Drying cloths kept right for

levellers we were given, a bank that’s a big bank that I’ve been with for 16 years, for them to do that to their customers is absolutely and utterly disgusting.

“I hope no one ever has to go through it again.”

Michael Wright, an executive in Westpac’s wealth management division BT Finance, said the advice was poor.

“It’s very clear this was not a viable strategy for the McDowalls,” he told the commission.

“I’m sure the McDowalls were passionate and excited about what their future could look like but the reality was it wasn’t viable. At that point in time, as professionals, we should have made it very clear this is not viable. It was poor advice.”