Class action proceedings have been filed against Count Financial, a former subsidiary of Commonwealth Bank of Australia after contravening its obligations under the Corporations Act.
The proceedings filed by Piper Alderman in the Federal Court of Australia relate to commissions paid to Count Financial and its financial advisers from 21 August 2014 to 21 August 2020.
The class action has come off the back of Count Financial's misconduct revealed in the Royal Commission and alleges it contravened obligations owed to clients when taking commissions from product issuers or clients.
Piper Alderman alleges Count Financial did not ensure its financial advisers did not contravene their legal obligations to clients, failed to ensure adviser remuneration was free from conflict, act in the best interests of customers nor provide services when fees were charged.
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Count Financial was a subsidiary of CBA until October 2019 when it was acquired by CountPlus. CBA has provided an indemnity to CountPlus of $300 million for the conduct that occurred prior to and after the acquisition.
The class action proceedings did not come without warning, as Piper Alderman made a call out for customers from the financial advice arms of AMP, CBA and Westpac who had either acquired, renewed or continue to hold a financial product on recommendation of an adviser from those institutions in the last six years.
This is not the only class action CBA may face as the law firm also called on clients from Commonwealth Financial Planning and Financial Wisdom.
In addition, Piper Alderman is interested in clients from AMP Financial Planning, Charter Financial Planning and Hillross Financial Services and from Westpac, Westpac Bank, Securitor Financial Group and Magnitude Group.
"Each of these institutions owed specific obligations to their customer designed to protect their customers' interests, and our claims will allege consistent and ongoing breaches of these obligations," Piper Alderman said.
Shine Lawyers also alleges CBA sold customers overpriced insurance. The law firm filed proceedings against CommInsure on August 21.
Class Actions practice leader Craig Allsopp said group members were entitled to compensation because they incurred financial losses as a result of conflicted or incorrect advice from financial planners affiliated with or directly employed by CommInsure's parent company.
"We allege the Commonwealth Bank's licensed financial planners failed to inform their clients they could obtain substantially similar or better insurance policies with lower premiums from alternative insurers," Allsopp said.
"Instead of putting their clients' best interests first, the planners were incentivised by commissions and other benefits to funnel people into expensive CommInsure policies.
"Customers trusted their advisors to make the best decisions for them but they were let down and - in some cases - have lost thousands of dollars."