More fees charged to the dead

AUSTRALIA’S largest bank thought it could continue charging advice fees to dead superannuation customers, before deciding it was wrong.

A Commonwealth Bank superannuation business knew about the problem three years ago but only recently stopped the practice, following revelations some CBA advisers had also charged dead clients.

It should never have happened, a CBA superannuation executive told the banking royal commission yesterday.

Super fund trustee Avanteos discovered in 2015 it had continued to charge adviser service fees on accounts after being told a customer had died. Avanteos thought it could deal with the issue by putting a line in a product disclosure statement saying “we will continue to charge adviser service fees after the member has died”, but it did not do so.

The inquiry heard the view in 2015 and 2016 was not that the practice should not be done, but that members needed to be notified. Linda Elkins, the executive general manager of CBA’s wealth management arm Colonial First State, said the position now was that it should not be done, and should have been realised 2015.

“On this review, the conclusion we made was that the practice should cease and should never have occurred,” Ms Elkins said.

It is the latest case of CBA — already dubbed “the gold medallist” for charging fees for no service — getting adviser service fees from the accounts of dead customers.

The commission’s April hearing revealed some advisers at CBA subsidiary Count Financial continued charging fees to clients’ accounts after they died, in one case for more than a decade. A review then uncovered the Avanteos problem. National Australia Bank has admitted charging more than 4100 dead super members $3 million in adviser service fees.