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None of the financial institutions are coming away from this Royal Commission covered in glory

April 19, 2018 - 00:16 -- Admin

The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry was established on 14 December 2017, is due to hand down an interim report no later than 30 September 2018 followed by a final report by 1 February 2019.As of 13 April 2018 the royal commission has received 3,433 public submissions - 69% of these were Banking, 8% Superannuation 8% and 7% Financial Advice.Round 2 public hearings finish on 27 April 2018.View the live webcast or previous hearings.Yesterday was the Commonwealth Bank of Australia's turn to reluctantly admit systemic fraud ....The Guardian, 18 April 2018:Counsel assisting the royal commission, Mark Costello, asked Linda Elkins, from CBA’s wealth management arm Colonial First State, to confirm CBA’s poor record of charging fees for no service.“It would be the gold medallist if [the corporate regulator] was handing out medals for fees for no service, wouldn’t it?” Costello asked.Elkins replied: “Yes.”The commission was told that from July 2007 to June 2015 clients of CBA’s Commonwealth Financial Planning, BW Financial Planning and Count Financial businesses were routinely charged ongoing fees for financial advice where no advice services were provided.CBA has had to refund $118.5m to customers – more than half the $219m in compensation paid by the big four banks and AMP over the past decade – to more than 310,000 financial advice customers.ABC News, 18 April 2018:Michael Hodge QC observes that Commonwealth Financial Planning has had a 100 per cent increase in clients over the past decade but a 25 per cent drop in the number of advisers.He asks CBA's Marianne Perkovic whether the bank had any concerns that clients were not receiving adequate attention because of the decline in advisers, while client numbers doubled.This is in the context of ASIC's concern that some firms were taking on too many clients for the number of planners. Ms Perkovic struggles to provide a clear answer.......After disputing the meaning to be attributed to internal memos between the bank's senior managers in early 2012, Ms Perkovic eventually had to admit that a Deloitte report handed to CBA in July 2012 revealed systemic problems in ensuring that customers weren't being charged for financial advice they did not receive.Deloitte had found that at least $700,000 in ongoing service fees were being charged to more than 1,050 clients that were allocated to more than 50 inactive financial planners who had left the business before 2012.It appears that Ms Perkovic was finally ground down by relentless questioning from Michael Hodge QC, warnings from Commissioner Kenneth Hayne and the irrefutable evidence of the Deloitte report.