NAB discovered in May this year that it had been charging fees for financial planning advice to a customer who was dead, the financial services royal commission heard today.
Michael Hodge, senior counsel assisting the commission, was questioning Nicole Smith, the former chair of NULIS, the NAB’s superannuation trustee, about fees charged for no service.
Smith confirmed that fees for advice had been deducted from a member’s account after being advised that the member had died.
Hodge asked when that was identified as an issue.
Smith replied: “In May this year.”
The Commonwealth Bank has also admitted to the royal commission that it had charged dead clients for financial planning advice.
One CBA adviser never provided any customers with advice, and even charged a client six months after they had died. He was forced to repay the fee to the dead person’s children.
In the royal commission today, the NAB saw a risk that financial advisers would depart if grandfathered trailing commissions were removed.
And internal NAB papers showed the bank kept financial advice fees despite no advice ever being provided.
Hodge pushed Smith, in a series of questions, on whether or not customers would be better off if such commissions were to be removed.
He said: “If you turn off commissions there is a 100% (likelihood) your members will be better off.”
Eventually, Smith said: “… it is in the best interests of members to be in products that do not pay commission versus products that do pay commission.”
Royal Commissioner Kenneth Hayes asked Smith: “Did you think yourself taking money to which there was no entitlement raised a question of the criminal law?”
Smith: “I didn’t.”
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