NAB will refund around $25 million to 62,000 clients affected by errors in its Navigator Wrap platform that date back to 2001.
As part of a review process that began in May 2014 and followed an independent review by PwC, NAB identified errors and processes related to how income and tax were being allocated to customers' accounts on closure.
"This resulted in surplus monies being held within the Navigator Platform Funds for the benefit of fund customers, rather than being attributed at the individual customer account level. At no stage have these monies been held by, or accounted for, as part of the assets of any NAB Group company," NAB said in a statement.
The bank emphasised that the errors were a "legacy issue" and that they occurred prior to NAB's 2009 acquisition of Aviva, which included the Navigator platform, and when Aviva was eventually integrated into the NAB business in 2011.
Group executive, NAB Wealth and chief executive of MLC, Andrew Hagger said NAB would write to customers and advisers over the coming weeks to explain this legacy issue and what NAB has done to fix the problem.
"NAB Wealth has applied significant focus to our breach identification and reporting processes, which is what led to NAB originally reporting this legacy issue to ASIC," Mr Hagger said.
"These errors date back to 2001 and are centred on processes and controls relating to Navigator – a platform NAB inherited when we acquired Aviva in 2009. Our teams have worked extensively, with oversight by PwC and ASIC, to ensure the right processes, systems and controls are now in place.
"These errors are in no way related to the quality of NAB Wealth's advice to its customers."
Commissioner Greg Tanzer commented: "ASIC expects banks to vigilantly monitor their platforms for issues such as this. Any issues identified should be swiftly and pro-actively reported to ASIC, with a view to promptly compensating customers."
ASIC acknowledged NAB Wealth's cooperation in this matter.
One third (34 per cent) of customers will receive a payment of $50 or less; 50 per cent of customers will receive less than $100; and 75 per cent of customers will receive less than $350. The average payment per customer is $400, which includes interest.
The only customers impacted are customers who closed their accounts on the Navigator platform between 30 September 2001 and 30 April 2015.
"The majority of money now being distributed to customers is being distributed from within the Navigator Platform Funds to the entitled customers. Given that the majority of the $25 million is being reallocated from the Navigator Platform Funds, this payment is immaterial to NAB," the bank said.
Comments powered by CComment
ifa proudly marked a decade of celebrating excellence in financial advice by honouring more than 30 winners at this ...
The AIOFP is disappointed by the first tranche of the government’s QAR-related legislation and has called on Canberra to ...
Clients do not always start their journey with holistic advice from the outset, and super funds providing basic advice ...
Never miss the stories that impact the industry.
Get the latest news! Subscribe to the ifa bulletin