The Commonwealth Bank will pay compensation after charging advice fees to the estates of dead superannuation customers.
CBA investment and superannuation subsidiary Avanteos knew it was charging dead customers in 2015 but only recently stopped the practice, following revelations some financial advisers had also charged fees to deceased clients’ estates.
The practice should never have occurred, CBA executive Linda Elkins told the banking royal commission.
Avanteos discovered in 2015 it had charged adviser service fees on accounts after being told the customer had died but decided it could continue if the charges were disclosed to members.
CBA said it now recognised that was the wrong approach and the practice should have been stopped immediately when it was first detected.
Australia’s largest bank said it will refund fees incorrectly deducted by Avanteos from deceased estate superannuation, pension and investment accounts and pay compensation for interest or lost earnings.
“While there are circumstances in which deceased estates will require financial advice, these mistakes are unacceptable,” a CBA statement said.
The bank has been reviewing its processes in relation to deceased estates since the April royal commission revelations that some advisers at subsidiary Count Financial continued charging fees to clients’ accounts after they died.
The royal commission will shift its attention to Australia’s largest wealth manager AMP on Thursday, with AMP Superannuation’s independent chairman and its director of regulatory governance scheduled to appear.