3 July 2014

#CONBANK SAYS SORRYBUT

CONSUMER PROTECTIONS HAVE TO
GO
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Today the Commonwealth Bank issued a public apology for nearly ten years of bad
behavior from their financial advisers.

CHOICE uestions the sincerity of this apology as the Commonwealth Bank has been
publicly lobbying for the reduction of consumer protections in the !uture of !inancial
"dvice or !o!" legislation.

#If the Commonwealth Bank was truly sorry they would not have lobbied to remove
essential consumer protections for financial advice. $ust a few weeks ago the
Commonwealth Bank wrote to the government calling for lower standards for financial
advisers % this action does not match today&s apology'( says CHOICE Chief E)ecutive
"lan *irkland.

Eight weeks ago the Commonwealth Bank made a submission to a +enate Inuiry
e)amining the ,overnment&s proposed amendments to the !o!" protections. The Bank
claimed that the original consumer protections resulted in #unnecessary comple)ity and
burden on industry.(-i.

In the submission the Commonwealth Bank supported all proposed amendments to !o!"'
including watering down of the obligation that a financial adviser must act in their client&s
best interests at all times.

#Today the Commonwealth Bank has acknowledged that advisers failed in their primary
obligation % to act in their client&s best interests. /et they have successfully lobbied for the
obligation to act in a client&s best interests to be watered down in legislation. If the
Commonwealth Bank is genuinely repentant they need to back strong consumer
protections.(

#Only three days ago' the ,overnment introduced regulations which wind back protections
for consumers seeking financial advice. These regulations took effect from 0 $uly 1203 but
can still be repealed by the +enate.(

#4ow more than ever' consumers need professional financial advice to help them save for
their retirement' not advice distorted by hidden fees and advisers pushing products that
don&t meet their needs.(

The Commonwealth Bank&s apology was issued after a 5arliamentary Inuiry uncovered
an aggressive sales culture amongst Commonwealth Bank financial planning businesses
which led to forgery' advisers hiding information from their clients and people losing life
savings.

#Consumers must be able to feel confident that they are getting impartial financial advice
they can trust. "nd advice should not be clouded by any type of financial incentive that
reward them based on how much of a particular product they sell.

CHOICE has launched a petition calling on all politicians to oppose the wind back of !o!"
at www.choice.com.au6financialprotection

M#/*$ .o!%$.%2
Tom ,odfrey' CHOICE' Head of 7edia and +pokesperson8 2392 0:1 ;;<

To -#$/ o-# o! CHOICE %#+%+3 -#0*#"+ $!/ .$($*)!+3 )o %o .&o*.#4.o4$u

5o5A B$.')-ou!/
The !uture of !inancial "dvice reforms were introduced in 1201 following e)tensive
consultation with industry' government and consumer groups.

On 7onday 92 $une 1203' "cting "ssistant Treasurer 7athias Cormann announced that
changes to financial advice protections will be implemented through regulation from 0 $uly
1203 where legally possible. The +enate is able to repeal this regulation in the coming
weeks.

In 7ay 1203' the Commonwealth Bank made a public submission to the +enate which
supported lower standards of consumer protection in financial advice.

CHOICE has strongly opposed all changes to !o!". !or more information see CHOICE&s
submission to the recent +enate Committee Inuiry e)amining these reforms8
http866www.choice.com.au6media=and=news6consumer=news6news6wind=back=of=fofa=will=
cost=consumers.asp)

-i. >uote from Commonwealth Bank +ubmission to the +enate Economics Committee
Inuiry into the Corporations "mendment ?+treamlining of !uture of !inancial "dvice@ Bill
1203.