The royal commission heard CFPL had complaints from customers about fees for no service for six years before the bank made a formal notification about the problem to the regulator in 2014. Loading ASIC accepted an enforceable undertaking from CFPL and BW Financial Advice in April 2018 after finding they failed to identify evidence regarding annual reviews into about 31,500 customers who had paid for those reviews. The latest order came after ASIC found CFPL had failed to meet the requirements of the enforceable undertaking, which required CFPL to provide a report by independent expert Ernst & Young that it had taken "reasonable steps" to remediate customers impacted by the wrongly levied fees and on the adequacy of its systems, processes and controls. CFPL received only a qualified “pass” mark from Ernst & Young in an October interim report and was given until December to fulfil its requirements.

The interim report noted that while CFPL had put in place adequate systems, processes and controls to meet its contractual obligations to customers paying ongoing fees, the firm needed to make further improvements to address "a low level of control awareness within the business, a high prevalence of manual processes and controls and limitations on its ability to analyse and report information for tracking and reporting of compliance centrally". Loading The deadline for a final report was later extended to January 31. ASIC said on Monday that although CFPL had paid $119 million to customers impacted by fees for no service, it had still fallen short of ASIC's expectations, triggering the regulator’s requirement for the business to stop charging ongoing service fees and not enter into any new ongoing service arrangements. That requirement would continue until ASIC's concerns were "addressed", the regulator said in a statement.

“ASIC included this requirement in the enforceable undertaking to ensure that if Commonwealth Financial Planning were not able to satisfy ASIC that the fees-for-no-service conduct would not be repeated, CFPL would have to stop charging ongoing service fees so as to significantly reduce any further risk to clients,” ASIC said. "ASIC has also been informed by CFPL that it is now in the process of transitioning its ongoing service model to one whereby customers are only charged fees after the relevant services have been provided. ASIC will monitor CFPL's transition to the new model." “Existing clients will continue to receive services under their ongoing service agreements but will not be charged by Commonwealth Financial Planning Ltd.” Commonwealth Bank did not provide a response when approached for comment. The bank's shares were relatively unaffected by the news, gaining 54 cents to close at $70.30.