Retired sugar cane farmer Myles Tenni is praying a powerful Senate inquiry will release a report on Wednesday that rights the wrongs he believes were done to him - and thousands of others - by Commonwealth Bank.
Tenni, who is 79, says after he sold his sugar cane farm in the late 1990s he invested part of it with Rollo Sherriff, who at that time was a star financial planner at Meridien Wealth, a former authorised representative of Commonwealth Bank's Financial Wisdom arm.
Like many of Sherriff's customers, the planner recommended Tenni gear up and take out margin loans with the bank.
By 2004 Tenni's retirement savings were decimated and his son Darryl was looking for answers. They hired accounting group William Buck to help investigate whether they had a case for ''negligent advice'' from Financial Wisdom.
The report, obtained by this columnist, concluded that if Tenni had not made further investments from borrowings using a margin loan, his initial investment would have gone up at June 30, 2004, instead of falling $333,941.
What the father and son didn't know was that the Financial Planning Association had suspended Sherriff's accreditation for five months after it found he had given ''inappropriate advice'' to some customers.
CBA backed Sherriff and by March 2005 his suspension had been lifted and, for its star planner, it was business as usual.
Tenni says he was contacted by the bank in early 2012 saying it had ''concerns'' with the advice of some former planners at Meridien Wealth and was reviewing his file. ''I was hopeful I would get my money back,'' he says. (Meridien Wealth changed ownership in July 2012 and it is no longer an authorised representative of CBA.)
But he says his hopes were dashed when a follow-up letter arrived in July 2012 saying although the advice he had been given was ''inappropriate'' he wasn't eligible for compensation on the basis ''we have compared your actual Colonial First State investment portfolios with portfolios modelled to reflect an appropriate investment for your situation''. It said: ''Your investments did in fact outperform the reference portfolios more appropriate to your situations.''
Fast-forward to today and Tenni says he contacted the bank after seeing an ad in The Cairns Post about Financial Wisdom last month about a potential reopening of compensation for Meridien Wealth clients. ''I worked hard all my life, on the farm and the caravan park, and I could have retired a lot earlier, but I lost so much money,'' he said.
Tenni is among thousands of Commonwealth customers who were advised by ''rogue'' planners and lost tens of millions of dollars after being pushed into Commonwealth products that generated high fees and commissions.
The reopening of compensation to customers such as Tenni is part of new conditions the corporate regulator ASIC has imposed on the bank's financial planning licences, saying that while the bank had contacted and paid some compensation to clients of two planners it had been ''inconsistent'' in how it had treated thousands more clients of other planners who might have offered ''inappropriate advice''.
The bank has paid burnt clients $52 million but the expectation is that a Senate inquiry into the performance of ASIC and its handling of the CBA financial planning scandal, including belated action to a tip-off from bank insider Jeff Morris and its subsequent oversight of the bank's enforceable undertakings, will result in a much bigger compensation pay day for the many customers who were victim to an aggressive sales culture and management that turned a blind eye to what was going on.
The scandal exposed in the past 12 months puts the bank in a dim light. Its chief executive, Ian Narev, and its former head of the wealth division, Grahame Petersen, never made it to the Senate inquiry to answer questions about the scandal or the compensation but left it to the bank's lawyer, David Cohen, who claimed the misconduct was merely ''inappropriate''.
The chairman of CBA, David Turner, has admitted that the Commonwealth was too slow to deal with the allegations.
But as a bank insider says: ''So how slow does our chairman think we have been dealing with the enforceable undertaking now that conditions on our licences have been imposed? These are no longer allegations but regulatory consequences of a serious nature.''
The report of the Senate inquiry will be released on Wednesday and it is expected to come down hard on the bank and ASIC.
Other financial institutions might also be quaking in their boots.
If the recommendations result in a stronger, more feared regulator and the bank is forced to do the right thing it will send a strong message to the rest of the industry.Author : Adele FergusonSource : Sydney Morning Herald