The NAB doesn’t know how many of its super fund members have been charged for advice they didn’t receive, the financial services royal commission heard today.
A series of questions by Michael Hodge, senior counsel assisting the commission, of Nicole Smith, the former chair of NULIS, the NAB’s superannuation trustee, about whether fees charged was for access to advice and not for actually delivering that financial advice.
Hodge referred to a letter from ASIC to Smith, dated May 9, 2018, headed “Suspected misconduct by NAB Group”. That letter referenced three earlier letters.
Smith said she did receive the ASIC letter but didn’t seek out and read those earlier letters.
“I am still unaware exactly what the poor conduct is and the extent of the poor conduct by the advice licensee,” she told the hearing.
“And I believe the point of ASIC’s review will determine the extent of the provision of advice services and the adequacy of that.
“At this point I know that the regulator is unhappy with the advice licensee with respect to the provision of advice services
“What hasn’t been demonstrated is who that relates to, how wide it is and how extensive it is.”
However, she agreed with Hodge that the key issue is whether or not services been provided in exchange for the adviser service fees.
Hodge: “You know that some of those adviser service fees have been deducted by the trustee from the members’ accounts and paid to advice licensees.”
Hodge: “And you don’t know, because nobody knows, because NAB has not done a proper review of it, in how many incidents and in how much of a total amount has the trustee incorrectly deducted from members’ accounts and paid to the advice licensees.”
Hodge: “Surely that is something that the trustee should take, not just an interest, but an active interest in.”
Smith: “I think that I have already said that the trustee has taken an active interest in that.”
NAB CEO Andrew Thorburn apologised to customers following revelations this week about the bank, including that it had charged dead customers for advice.
“In the royal commission we’ve been confronted with examples of where we have failed to serve our customers with honour,” he said. “And I am sorry for that.”
This week we’ve been confronted at the Royal Commission with examples of where we have failed to serve our customers with honour. I’m sorry. And my commitment is that we will learn and get better, so we can once again be a bank you respect and trust. pic.twitter.com/yMGq7icgVu
— Andrew Thorburn (@AndrewThorburn) August 9, 2018
The commission was told 305,000 super fund members will get a refund of about $220 each plus interest.
So far, the NAB has paid out $87 million in compensation.
Commissioner Kenneth Hayne earlier today rejected a request by NAB for a non-publication on a series of documents, some dealing with ASIC’s investigation, the regulator’s suspicions of wrongdoing by the bank, and remediation of wrongly charged fees.
“It is in the public interest that there be an open and transparent inquiry about how both the regulator and the regulated deal with the issue of remediation,” he said.
Business Insider Emails & Alerts
Site highlights each day to your inbox.