A number of former customers of Commonwealth Bank of Australia-owned financial planning licensee Financial Wisdom (FinWiz) remain unclear about where they stand in seeking compensation for bad financial advice they received between 2008 and 2010.
Professional Planner has learned from two former clients of disgraced North Queensland financial planner Rollo Sheriff, who was a co-owner of Meridien Wealth, an authorised representative of FinWiz, until June 2012. Both spoke on condition of anonymity when describing their experience of calling a 1800 telephone number advertised by Commonwealth Bank. This phone service was established as part of the bank’s Australian Securities and Investment Commission (ASIC)-imposed enforceable undertaking (EU).
One client, Elaine* from Cairns in northern Queensland, was a client of Sheriff’s in 2010, when he advised her on the investment of $100,000.
“I was assessed as a moderate risk [client], and he recommended I take out a margin loan, so I borrowed $100,000, [which was] as much as I invested,” she says.
According to Elaine, since then her investment has “proceeded to lose money, so yeah, it hasn’t done well at all…it was a bit of a bad time”.
Elaine only learned she may be eligible for a $5000 payment from Commonwealth Bank, to assist in gaining independent advice from a legal or financial expert, after reading an advertisement in the Cairns Post last Wednesday 21 May.
This advertisement only ran in the newspaper once, as confirmed by the News Corp Australia-owned publication’s sales department.
Professional Planner called the advertisement’s 1800 number on Monday 26 May, waiting in a telephone queue for more than 20 minutes before abandoning the call.
When Elaine phoned a week earlier, she was connected to an operator almost straight away.
“He asked for my name, who the adviser was…they said they’d put a case manager on it and someone would call in 24 to 48 hours,” she says.
As of Thursday 29 May – some eight business days later – Elaine had still received no response.
“My sister also rang, she hasn’t had a call either,” she says.
Melissa*, who now lives in Adelaide after relocating from north Queensland some years ago, was also a client of Sheriff’s, but from early 2008. She was connected to an operator quite quickly after dialing the number early last week.
“[The operator] took my details, and that’s all,” Melissa says, expressing her surprise at being given no estimated timeframe for when she might receive a response, “and no reference number or anything”.
By close of business on Friday, she had still heard nothing further.
“I just really don’t know what it’s about,” she says, having only learnt of the offer after receiving a call from David Adiseshan, who bought Meridien Wealth almost two years ago.
New information delays Senate committee report
It emerged this week that CFPL had failed to provide the Senate economics references committee with full information about its handling of compensation claims in relation to the actions of Sheriff and a number of the group’s other financial advisers.
According to an interim report the Senate committee issued last Wednesday 28 May: “This revelation suggested that, for some time, the CBA had not kept either the committee or ASIC fully informed about the compensation process for clients affected by serious misconduct within CBA’s businesses.”
As a result, the delivery of the committee’s full report has been delayed to no later than 26 June, after initially being due on Friday 30 May. This extra time will be used in considering additional information provided by ASIC and CBA on 16 May.
Waiting game continues
In the meantime, wronged clients continue to wait. Asked what she is going to do next, Melissa says: “I don’t know – I don’t really understand how it works.”
“There’s not enough information about it,” she says, with her limited understanding “all just based on that number in the article [in Cairns Post], so I’ll wait and see if they call me back [then see] what the go is”.
“With a financial adviser, you’d think they’d advise what you do, keep you on track, that’s what you’re paying for,” she says.
“Hopefully some people have had their situations rectified with some decent advice.”
*Names have been changedAuthor : Glenn FreemanSource : Financial Planner