In 2013 the bank “moved on” former Godfrey Pembroke adviser Lawrie O’Neill for “sustained poor compliance”, according to a document penned by NAB Wealth group executive Andrew Hagger tabled in the federal parliament in recent days.
Mr O’Neill was president of the dealer group’s practice development group (PDG) and a finalist in Money Management’s Financial Planner of the Year awards in 2003.
The PDG’s aim is to “keep Godfrey Pembroke at the forefront of the financial planning industry and steer the future direction of the group” according to a post on the dealer group’s Brisbane office website.
ifa understands the PDG represents the member firms, has its own constitution and plays some role in monitoring of ethics and adviser professional standards.
Mr O’Neill has since resurfaced as owner and director of Perth-based mortgage brokerage Savanna Home Loans.
Other “high producing advisers” moved on by the bank include Storm Financial founder Emmanuel Cassimatis, former Apogee adviser Craig Stubbs, NAB FP adviser Graeme Cowper and Garvan adviser Nick Sinclair, the document reveals.
These individuals were singled out in order to demonstrate NAB’s superior advice misconduct handling policy in comparison to its competitor, the Commonwealth Bank.
“NAB Wealth has encountered, and continues to encounter, cases of inappropriate advice and occasionally, rogue advisers,” Mr Hagger wrote.
“Our approach to dealing with these situations does not differentiate based upon whether the advisers concerned are high revenue earners. NAB Wealth has a long history, going back to the 1990s, of terminating high producing advisers who do not fit its culture.”
More broadly the document – which was intended as a brief to the bank’s Group Regulatory, Compliance and Operational Risk Committee but was subsequently leaked to Fairfax Media and tabled in parliament by Nationals senator John Williams – distances NAB from the issues in CBA’s advice arm.
“The differences between NAB Wealth’s operations and CBA’s as described in the Senate inquiry are significant,” the document states.
“We have not found the sort of systemic breakdowns identified in the [Senate report], particularly in relation to the culture within NAB Wealth that the Senate inquiry and ASIC have found in relation to CBA.”
Senator Williams told ifa last week that backbench support for a Royal Commission into financial planning was growing in light of the revelations.
Steve, I wish I was a planner to make a change in your industry. I know how the bank operates as an ex-Bank Area Manager looking after a number of branches – the staff who refer to you & Cowper alike. Banking & Wealth division operates separately in your organisation but leverage on each other. I sincerely hope there is no FUM & Risk required now because it has always been a KPI on every scorecard review I sat in.
It’s natural for big organisations selling their own products. Bankers do & so as bank planners. Unlike mortgage brokers or non-aligned planners, most of them just simply don’t have a choice. I have used both bank & boutique planners. I am yet to meet a bank planner who recommends a 3rd party product (excluding retention of a product).
Now I run my own mortgage broking business with plans to employ a planner. I am watching this space closely & it’s interesting to see those inconsistent statements when I know how a bank operates.
Steve how sound your words are, Damian is correct, Mr Cassimatis was asked to leave MLC in 1996, nearly 20 years ago. Just shows how far back some articals and reports will go to make a story or push an agenda
Perhaps MLC are changing 15 years ago they were told that Cassimatis was an accident waiting to happen and should not have an authority. Compliance were told he was their largest writer and he was to have an authority most of the compliance and training staff left Cassimatis stayed. How do I know I was one of the training and compliance people (I left). Some of the management staff that condoned his behaviour are still at MLC !!
Michael, so you’re one of those planners who think that the value added through advice is highly correlated to product selection? Of course I primarily use MLC, but THERE IS NO REQUIREMENT FOR ME TO DO SO, nor do I have any ‘FUM’ targets and nor do I use any MLC managed funds, at all…
Again, perceptions lag reality…
Anyhow, are you suggesting that most planners don’t have a particular platform that they tend to use the majority of the time? It makes operational sense to use primarily 1, maybe 2 platforms and let’s be honest, they’re all much the same. Competition is to tight for there to be dramatic differences in capability or pricing. The value added by advice relates 99% to the advice provided (both initially and ongoing) and NOT the product selected.
It amazes me how many planners bang on about how they charge or what products they use or being ‘independent’ when all of that is secondary to providing good advice.
Or perhaps the management just give a few names regardless of the circumstances to put up a show that they are doing the right thing?
Good on you Steve. I wonder if your quality advice is limited to PRIMARILY MLC’s or NAB’s products & that it is subject to the Bank’s targets imposed on your KPI? How many of your financial plans did not mention about “MLC” or “NAB”? Is you definition “quality advice” in the context of NAB or the Banks?
The media seems to focus on FPs but shy away from the fact that it is the management (basically Practice Development Managers headed by State Managers & GM) who hires, supervises & drives the culture.
NAB requires revenue validation for FPs to receive bonus. It’s the MANAGEMENT who gave Cowper the awards, YEAR AFTER YEAR, based on sales. If they feel that was an issue, why would that not picked up during regularly reviews & behaviours rewarded repeatedly?
PDMs are responsible to allocate books & leads to advisers based on who they like. The choice is often simple, give them to those with sales & get them bonus. Now with this saga, management just find a few scapegoats & brush their hands clean.
Most of these PDMs & FPs are still with the big names from the Big 4, Dixon, State, Macquarie & Crofts. Cowper got into IPAC because of Prasad.
To be fair, the PDMs should be held liable equally if not more.
[quote name=”Alan”]I cannot believe that NAB was employing Storm Financial founder Mr. Cassimatis. He should be in gaol, not giving dodgy financial advice.[/quote]
I expect that the report would reveal that Mr Cassimatis was associated with MLC (which later became part of NAB) well before the days of Storm Financial.
Dear comment #2 ‘concerned’,
I’m a Senior Planner, at NAB, and my primary focus and most of my time is devoted to providing existing clients with a very high level and quality of pro-active, holistic, ongoing advice.
Great advice from highly qualified, experienced and professional advisers is not mutually exclusive to dealing with a bank and this perception needs to catch up with the current state of affairs.
Is the NAB’s definition of “sustained poor compliance” changing commission and fee rates on applications without the knowledge of clients?
If the NAB wants to be open and honest, detail the reasons they asked the adviser to leave. Let’s see if it were the compliance officers of NAB that found practices wanting, or the screams of clients that forced their hand.
With ASIC now taking accountability down to the adviser level, now moreso than ever before, why are Licensees even a requirement?
Our profession would be better off to have professional bodies like the FPA & AFA replace Licensees and used to disseminate all the ongoing compliance information & checks etc etc for a set fee. Similar to what the accounting/medical and legal professions do…
I cannot believe that NAB was employing Storm Financial founder Mr. Cassimatis. He should be in gaol, not giving dodgy financial advice.
I believe there is a huge difference between ‘poor compliance’ & ‘inappropriate or corrupt advice’. Poor compliance is to do with the ability to process the ever increasing & burgeoning administration required in the delivery of advice. Corrupt advice is criminal & should be dealt with accordingly. The reporting process of Licensees, who will all have different criteria ‘to be deemed compliant’ should differentiate when reporting the ‘release’ of an Advisor.
I can’t say I have ever worked for a bank or large financial institution but whenever I meet planners that do or have worked for these groups, they all say the same thing. The focus is on getting new business, not providing ongoing advice to existing clients.
All financial planners will continue to be dragged through the mud until we get to a situation where the banks and large institutions move from a sales culture to a professional advice culture. However I can’t see this happening.
Personally I would like to see banks and large financial institutions get out of the advice space.
So what about reportable breaches, NAB?