By Adele Ferguson and Deb Masters
Monday 5 May 2014
This is a story about ordinary Australians taking on Australia’s biggest bank. It begins with a dying man who believed the Commonwealth Bank wronged him and who was forced into a David and Goliath legal battle in the last six months of his life.
“It’s going to be very hard for me to trust anyone at any bank at any given time because they were just ruthless… They knew he was an easy target and they just went for it,” his daughter told Four Corners.
This week in a joint Four Corners/Fairfax investigation, reporter Adele Ferguson examines a sales-driven culture inside the Commonwealth Bank’s financial planning division that has been described as profit at all cost – a culture that has been built on commissions.
The program also looks at the wilful practices of another financial planner, whose annual salary was almost half a million dollars. The CBA protected him until a whistleblower and several of his clients fought back.
The planner’s customers, mostly retirees, believed the Commonwealth Bank when it said it was ‘the people’s bank’. But when they saw their life savings disappearing as a result of bad advice, they knew they had to act. Adele Ferguson tracks down the planner.
This story reveals how those customers who believed they were wronged took on both the bank and the corporate regulator, ASIC, and won. There are others who didn’t fight and may have lost their life savings.
The CBA says it has since cleaned up its act and there is no place for so-called ‘rogue’ financial planners.
The program comes at a time when Australia’s biggest banks are trying to expand a system that rewards bank tellers and financial planners for selling their products to customers.
The Federal Government also wants to make changes to the financial advice legislation that would reintroduce some of the commissions and kickbacks that had been banned under the previous government. If the reforms go ahead it will potentially mean financial planners are less, not more, accountable to their clients.
This program is a sobering lesson for all.
If you have money to invest or you are setting yourself up for retirement this is a program you cannot afford to miss.
BANKING BAD, a joint Four Corners/Fairfax investigation reported by Adele Ferguson and presented by Kerry O’Brien, goes to air on Monday 5th May at 8.30pm on ABC1. It is replayed on Tuesday 6th May at 11.00am and 11.35pm. It can also be seen on ABC News 24 on Saturday at 8.00pm, ABC iview and at abc.net.au/4corners.