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CBA to review fees charged to dead clients as part of revamp of wealth division

Commonwealth Bank of Australia plans to take a number of initiatives within its wealth division to remove some fees charged on legacy wealth products and review fees charged to deceased clients.

The moves "form part of our response to specific issues identified this year through the royal commission," said Michael Venter, COO for CBA wealth management. The ongoing inquiry into the Australian financial sector has so far uncovered issues in the banking, superannuation and financial services sectors, including misconduct at banks' financial advice businesses.

CBA said Oct. 9 that it will conduct a review of advice fees charged to deceased estates going back seven years, and will compensate clients for any instance that unauthorized fees were charged.

The Australian bank also plans to remove certain fees on legacy wealth products beginning January 2019, which is expected to save customers A$25 million each year. The lender will also rebate all grandfathered commissions to customers from January 2019, which will benefit around 50,000 client accounts by approximately A$20 million per year.

Further, the bank will provide all wealth customers with an option to renew their ongoing service arrangements every two years.

An interim report released by the royal commission at the end of September noted that misconduct at financial companies was magnified by insufficient oversight on the part of financial regulators. Further commission hearings will look into whether changes need to be made to regulators' enforcement practices.