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CBA mulled warning dead customers about fees in product disclosure statement
Australian Financial Review Aug 15 2018 4:14 PM
James Frost
The Commonwealth Bank's superannuation trustee, Avanteos Investments Limited, considered covering its tracks over the charging of dead people for financial advice by updating its product disclosure statement (PDS), the Hayne royal commission heard.
Counsel assisting Michael Hodge, QC, was questioning Colonial First State's executive general manager Linda Elkins about a range of conflicts within the bank's superannuation trustee business, including the charging of dead customers for financial advice.
Ms Elkins explained that following revelations that the bank's financial advisers had been charging dead customers for financial advice back in April, a review of the bank's superannuation arm took place which revealed it was charging dead superannuation customers as far back as 2015.
Ms Elkins said that in a review conducted this year, it was found that a way to fix the problem would be to update the PDS with the information that dead customers would be charged for up to three months.
"The view wasn't that it shouldn't be done, it needed to be notified to members, but in 2018 the view was that it shouldn't be done?" Mr Hodge asked.
"That should have been the view in 2015 as well," Ms Elkins conceded.
Mr Hodge then asked if the attempt to cap the fees on dead customers at three months was ever introduced.
"No, we can see there was an attempt to put business rules around this but ... they weren't effective," Ms Elkins responded.
The Commonwealth Bank is not the only bank to be exposed for the practice of charging fees to dead customers. During the first week of hearings into superannuation big-four rival NAB acknowledged it had acted similarly.
