In a statement issued after 8pm on Friday night, NAB Wealth boss Andrew Hagger confirmed the bank has been engaged in a major financial advice compensation project over recent years, following allegations aired in the Fairfax newspapers.
“Over the past five years, we have compensated over 750 customers and paid out between $10 and $15 million in compensation in situations where we didn’t get it right the first time,” Mr Hagger said.
“We were transparent with this information, with our senior management team, the NAB Principal Board and our regulators.
“Where we have problems we face into them. When this has meant providing compensation to our customers who have received bad advice, we have done so.”
Mr Hagger encouraged employees to use the bank’s whistleblower service or to “reach out to the regulators” if dissatisfied with the internal process.
The comments follow a number of stories instigated by an internal NAB document leaked to Fairfax which suggests 31 NAB financial advisers have been fired in the past five years due to “conflicts of interest, inappropriate advice, inappropriate practices or serious repeat compliance breaches”.
An additional six advisers have been sacked from the NAB-aligned Meritum dealer group, according to newspaper reports.
The internal document allegedly makes reference to the scandal that was, at the time, engulfing its competitor the Commonwealth Bank.
“While there is no regulatory supervision or review required, the existence of these cases means there is the risk, should they come under political or media attention, that links could be made to the CBA situation,” the Sydney Morning Herald reports the document as saying.
The revelations have reignited calls for a Royal Commission into the financial planning industry.
full credit to NAB?! Ha! Tip of the iceberg. Wait til the rest of the skeletons are let out of the closet come out before judging NAB’s adviser compliance a success.
These guys only pay to make the problem go away temporarily. The managers responsible are probably all long gone, promoted or in other firms now. They took their bonuses and ran. The many good staff who did the right thing will be left to pick up the pieces.
While I am generally against vertical integration (too many conflicts – both real and perceived), the irony is that this story shows some of the benefits of VI.
NAB found the problems and adressed them. They fired the staff respinsible and compensated the clients who lost out.
This never happened with Storm, Timbercorp, Great Southern etc. Unfortunately, it also did not happen with CBA Financial Planning so we have seen both sides of the equation here.
Nevertheless, full credit must go to NAB for adressing the issues at the time – and before anyone suggests otherwise, I have no connection to NAB. Imagine how many less people would have been adversely affected if CBA FP had done anything close to this.
Well said Steve. Anti has shown where his efforts are concentrated. “product”. Good luck with that one. Your clients, if you have any wont give two hoots about product when you miss the main reason for your existence. “Advice”. I may have assumed incorrectly that you are in fact an Adviser however.
Anti V-I… Do you really think there is such a massive difference between products? Do you really think that even after the banks and AMP have spent tens of millions on product development, back office support, technology, etc, that their products are inferior? Compared to what…? I suppose you just use big shoe boxes for paperwork and avoid all platforms, etc?
Can you comprehend that ADVICE will determine 95% of the outcome, not the product?
So long as a product has the features and benefits needed, good processing & low fees, they are all much the same.
You sound like the Ford dealer who has 200 reasons why the latest Falcon is so much better than the latest Commodore, when really, they both have very similar engineering, milage, safety features, bells and whistles, etc.
Worry more about the advice and less about the products my friend, you’ll have happier and more prosperous clients and probably lift your profits too.
Areal, did you actually read my?
I don’t earn any bonus linked in any way to products, volumes, etc. We have a model where each adviser is expected to generate enough revenue via advice fees to cover the cost of their role existing. If revenue is greater than cost (= profit) then some of that profit is shared with the adviser.
Isn’t that how any good business works?
Don’t you share in your businesses profits?
Also, again, did you read my post???? re advice, products, etc… I’m sure there are poor bank planners who ‘sell products’, sometimes not in the clients interests, just as there would be in IFA world, but that’s not me and as the article states clearly, NAB doesnt put up with that either!
Maybe IFA should change its name to NOFA (non-aligned financial adviser). Could improve the readership numbers…but on the other hand it rhymes with FOFA…forget it, bad idea.
Gerry, at least we can choose their products
Steve
When you write “LETS JUST GET ON WITH GIVING QUALITY ADVICE TO PEOPLE WHO NEED IT”
Do you mean “LET’S KEEP THE MEDIA LIGHT OFF FINANCIAL PLANNING SO US BANK ‘PLANNERS’ CAN CARRY ON GETTING MASSIVE BONUSES TO SELL BANK FINANCIAL PRODUCTS WHICH ARE SOMETIMES (BUT NOT ALWAYS) BENEFICIAL TO THOSE WHO BUY THEM”.
That’s what I read anyway.
MLC (home of the IFAs) – You can have any flavour as long as it’s chocolate.
“..forum for independants” LOL. That doesn’t bode well for the advertisers on here then as the readership must be very very very small.
Steve, please grow up and realise the age of independence has arrived and the consumer fraud of “aligned” advice and hidden ownership is coming to an end. You’re entitled to your view but this is a forum for independents, look at the top left corner of this site. perhaps you are better off hanging out on FPA/bank salesman forums.
Hey ANTI, please grow up and use some common sense mate…
Most people, planners and clients alike, couldn’t care less about the definition of the word ‘independent’ or if the planner they have is or isn’t.
Most people just want to work with a planner they trust, are comfortable with, who is competent, experienced, knowledgeable & a genuine professional who above all else, provides advice & service that assist’s them meet their goals.
Can we please stop arguing about how to charges fees, what products we use, if we are ‘independent’ or not, etc.
LETS JUST GET ON WITH GIVING QUALITY ADVICE TO PEOPLE WHO NEED IT and then perhaps the press will be kinder to us.
I have thoughts and views on fees, commissions, managed funds vs shares, etc, but not to the extent that I think I’m right and there is no other way. Difference creates competition, some will fail, some will prosper.
Steve, there’s no such thing as an “IFA under a NAB-aligned licensee”. This is a NAB planner. Little wonder clients are confused and we are a political footbakll
I’m a Senior Planner with NAB. I’m proud that we have identified and got rid of these poor advisers, but let me be clear, only 8 were ‘bank planners’ and the rest were “IFA’s” under NAB-aligned licencees. And these occurred over a decade. A fraction over 1% of the NAB-employed planners. Hardley wide-spread corruption!
We have very high standards for existing planners and set the bar very high when recruiting too.
Good luck finding any business in any industry that doesnt have at 1-2% of it’s employees not working in alignment with the values, goals and ethics of their organisation…
Anyone who sees anything at all in the media as representative of a larger group is closed minded and simple. If a black man steals a car, that doesnt make all black people thieves. If a husband hits his wife, it doesnt make all husbands wife beaters. If a tiny handful of NAB planners were crap, it doesnt mean all nab planners (or all planners) are…
Confused….it’s significant if you don’t understand scale.
Can you people please learn to spell? When you write “your” instead of “you’re” YOU are telling the world you can’t even spell, let alone be capable of providing sophisticated advice. You are embarrassing not only yourselves…
The last word – manufacturers should not be distributors, nor ‘advisers’.
I’m confused by the comments in regards to the nab issue. Press coverage isn’t unbalanced and this isn’t trivial.
Its still not clear how many of these advisers were reported to ASIC. Within the report they declared wanted to offer higher upfront commissions – poorly timed comment.
Lets not forget compensation was brought about by complaints not by their internal audits and compliance. And they still rate themselves as red. This would be more impressive if they were actually transparent given the environment we are in. The fact your own staff leaks it and their communication with the regulators is questionable – is a big deal
Anti V-I
No…not an NAB planner, yes my web site as do my clients know who I am.
I just don’t troll all the comments spuking myself as a god of the industry
Another headline about advisers behaving badly! What annoys is the fact that these headlines paint a pictures of a corrupt industry full of cowboys and fraudsters. Nothing could be further from the truth!! The vast majority of financial advisers do place the needs of their clients before their own, and did so well before the introduction of FoFA. Let’s not forget the fact that in this case a couple of bad apples DON’T spoil the barrel full of good apples!
The banks keep shooting themselves in the foot and are bringing the perception of the whole financial planning industry down with them. Financial planning is a relationship based business where trust is earned and defines success. The banks continue to try and build brand that implies they are in the relationship business despite the fact they keep treating their customers, staff and business alliances like numbers. They refuse to accept the bleeding obvious. It is time that the regulators step in and force them ( as well as the industry super funds ) out of their pretence of offering financial planning advice as neither have any proven basis to make these claims.They should both be treated as product manufactures. No more no less.
Anti V-I, please keep up. Your desire for bank planners to fully disclose their ultimate ownership will be met via the new ASIC financial advisers register coming in on 31 March. This is just one of a huge range of reforms and protections introduced over recent years. Financial planning today is completely different to what it was 5-10 years ago, when most of the scandals occurred. For Fairfax to carry on as if the scandals are new and the industry hasn’t changed, is quite misleading.
Given that Fairfax has a vested interest in more people making decisions based on advertising rather than advice, it’s not surprising they continue to mislead the public like this.
Anti Vi….I think you stand for hysterics and lack of perspective.
It never ceases to amaze me the degree to how sucked in some get based on an overblown newspaper article developed with a conspiracy theorists mentality.
Another nail in the coffin for “Financial Planner”, a name the Federal Government made up in the early 1990’s to ease public sentiment over rampant investment scams directed mainly at retirees.
There is no such thing as a financial planner.
One person cannot be an expert in all the disciplines of taxation, estate planning, insurance, superannuation and investing.
The sooner the Govt wipes the slate clean of this so-called industry and starts afresh, the better.
Accountants will advise on tax & super, lawyers will advise on estate planning, insurance experts will advise on insurance, and investment advisers will advise on investments and investment products.
If you cant find a niche in just one of those disciplines and make a career out of it, then stop pretending and get out of the way.
The End
NAB just does not get it.
The statements that “We were transparent with this information, with our senior management team, the NAB Principal Board and our regulators” ignores the two groups NAB needed to be transparent with – it’s broader customer base & the public in general.
This has all the hallmarks of just being another arse covering exercise by the banks, which has, unfortunately for them, found it’s way into the public domain.
Until there is a full & comprehensive investigation into the action of all the big players in the financial advice sector, nothing is going to change,
We need to work out a way to extract all the good people who are working for banks or aligned to banks or any other product provider.
Every time something like this happens, all the good work that is achieved in a year is kicked back three.
I find it hard to understand how we (the profession) continue to tolerate it…
as a retired financial advisor with NAB its nice to see the system working by getting rid of cowboys who do not want to comply with the rules
Anti V…what a blowhard. 35 Advisers over 5 years and a piddling $15 Mil. Its a consequence of doing business and employing thousands of staff and its not confined to banks. Are you sitting in your bedsit with tinfoil hat waiting for the aliens to invade? Get out and go for a walk its not healthy sitting inside breathing your own flatulence continually.
Let me guess – your a NAB planner but your website doesnt say so and your clients dont know, this shit needs to end
wouldn’t mind if they told their millions of customers, hundreds of thousands of shareholders, or just didnt do it in the first place. Your right I am anti anything that is not independent, professional advice. What do you stand for?
Anti V-I
Your anti everything except for the way you do things becomes tiresome. Its never been hidden just not reported by the press. What would you like they run an add in every paper in Australia everytime they sack someone and the reason why?
Frustrated are you joking? The only reason this is different is because the media and public didnt find out until now. This is the final straw, the banks need to be banned from advice
Press coverage on the weekend of this issue is so unbalanced. This is totally different to the CBA issue – NAB has fired planners and reimbursed clients. It shows that IDR processes are working. 35 planners out of 1700 in a 5 year period is miniscule, every industry has problems with a certain percetage of their workforce – at least if they are employed by a bank (rather than the likes of Storm) compensation is available