NAB today announced that NAB Financial Planning (FP) and NAB Direct Advice will no longer accept grandfathered commissions from NAB Wealth superannuation and investment product providers.
The bank said that around 32,000 superannuation and investment customers will benefit through fee rebates and reductions, totalling approximately $11 million, with effect from 1 January 2019.
NAB FP and NAB Direct Advice will also work with external product providers to have grandfathered commissions currently paid to them applied for the benefit of members.
“We need to continue to focus on customers and keep finding ways to improve, to lift and to rebuild trust,” NAB group CEO Andrew Thorburn said.
“To do this we must continue our important work to transform the bank to be simpler, faster – and better.”
NAB said it supports a complete move away from grandfathered commissions at an industry level – but will continue to honour obligations to aligned advisers and independent financial advisers under FOFA legislation.
“This is a complex issue for the industry, and NAB believes the right framework needs to be in place to appropriately transition off grandfathered commissions,” the bank said.
“We look forward to working with the wider industry and regulators to ensure this is done in a considered way in line with community and customer expectations.”
I wonder if this is like BT Wrap Essentials. They take the high moral ground themselves, but won’t allow independent advisers to have commissions rebated so they can be replaced with fees. Leaving advisers stuck with conflicted remuneration and clients cannot be switched due to CGT and grandfathered Centrelink issues. These product providers make me sick. FOFA is more than 5 years old for god’s sake!
If I were an AMP adviser I would be rushing to sell back all commission clients, keep their names, write them back with fees in 12 months time! win win
Simplest way to respond is vote with your feet, place your clients Interest first and place their investments with a non bank organiastaion
If Mary Poppins wishes to fulfill her dream of developing the “profession”, the first step is the removal of the salaried adviser from the product manufacturer.
Xero is a great product, so too MYOB, however they are suppliers to the accountancy profession, not the accountants boss.
Xero partner practices buy it wholesale from Xero and sell it to their clients at retail.
And accountants have made a conscious decision not to have a public practice certificate issued/ licensed by Xero. Yet planners are quite happy to have MYOB as their boss, then go out and change there firms name to hide this relationship and promote they can supply either MYOB, Reckon, Quicken and Xero… all on the basis MYOB have told them they can promote any software.
good point. Xero, MYOB, etc also do not charge an asset based fee.
Great way to look good, without changing anything… The net effect for the Banks is Zip.
When we look now going forward at what’s needed to reduce red tape and access to advice it’s the following. What is needed is to force by legislation all those advisers that openly elect to operate under a NAB majority owned licensee into rebranding under the banner of NAB. When these advisers realize they themselves are holding back the industry and we have two sets of advisers (aligned and un-aligned) we’ll be a profession. There is nothing wrong with Bank planners or Planners working for a Product firm, it’s now this other sub set of advisers that openly elect and their free choice to operate under this heavily subsidized (commission by another name) licensee that over the coming years will be seen as unprofessional. The advice landscape is changing and this group of advisers are being quickly left out in the cold. The line in the sand has been drawn.
Anne, if I work for an Industry fund (Salaried), do I have a conflict of interest?
There is a big flashing sign saying Australian Super on the door or website. Plus these advisers are employees. When their representatives go to Government they clearly represent Super funds. When our representatives go to Government we are perceived as representing BT. In the example of Australian Super hopefully it is far easier for consumers to recognise 1) they’re only going to get advice on salary sacrificing and super and 2) only Australian Super. Compare this to say yourself where you have a free choice of licensee but have elected to be licensed by say Securitor/Magnitude/Gavan etc etc. Bank owned licensees which openly say to your face you’re free to use any product or platform…but then will manipulate the system to increase the probability of more FUM. The sooner we ourselves self regulate and move to a Doctor/Drug Company/Pharmacist model, the sooner Governments will take us all seriously. At the moment as far as advice goes the Drug Companies own the Doctor Surgeries and Treasury & ASIC will never take us seriously.
So what in on the door in a “big flashing sign” when a client walks into a CBA, NAB, ANZ branch?
Although I understand your argument, what is the difference between a CBA planner and an Australian Super “Planner” other than exemptions they enjoy?
Is it not the aim of all this regulation to protect the consumer receiving conflicted advice and potentially switching to a super fund which makes the client worse off? I can’t see how the sign sayings it is Aussie Super here prevents this conflict. Perhaps the only way is for ASIC to hold the dealers licence and they can control the product list.
In your rant about vertical integration, you didn’t answer the question posed Anne. If you work for an Industry Fund (Anonymous), yes you are conflicted as you can only offer intra fund advice. How is that satifying your BID obligation? Also, ADG who are influenced to sell bank product also have a moral hazard to manage.
Anne, you made the statement “hopefully”. Lets hope all those people moving to an Industry Fund understand they are not getting any advice over the phone and no one is responsible for any loss of benefit of any fund closed etc etc. And you hope.
As for the Drug company/Dr/Pharmacist model – are you saying this is a good model with no conflicts?
You and I know the “deficiencies” in advice from Industry Super funds, yet great advisers (whether they are licensed by the banks or whomever) are the ones buried in paperwork. I can’t see any advisers asking questions as to how we avoid the FASEA, LIF, FoFA’s of the future. I’ve met some pretty terrible Doctors but notice you don’t get a 400 page SoA when you need treatment for a headache.Maybe a model worth adopting, certainly the current model hasn’t worked out too well for us
Interesting. They recently turned off plan service fees for all advisers too. The other day I had a missed call randomly from a client with that service fee turned off. No message, but I didn’t bother to call him back as I no longer get paid to do the administration on his account. He can call MLC and they can do the work.
Really? I call bullcrap on that comment. Why wouldn’t you return the call they may have wanted something else, or you could have tried to convert him to fee for service?
They did the same to me. Switched off Plan service fee for clients I was looking after.
on a separate note a salaried advisor gets wages, they make bonuses on 3 to 4 times their salary. Switching the trail for salaried channel. Who is going to look after the clients now? Doesn’t this make the case for looking after clients even worse?
If that is your attitude then you shouldn’t have clients!
Sounds sensible , aligned advisers can still get paid for looking after their existing clients . For all those younger planners ,remember most of these clients were charged nil upfront for product advice and placement , not like the heavy costs upfront today that many cant afford .
Are you serious ? Don’t you remember the upfront commission of 4% that went with those products
Or the 4% exit fee for a few years (the NEF – Nil Entry Fee products)
Nice PR exercize but a failure to stand up for the advisers that have supported them by providing ongoing service to these MLC customers and being remunerated by the trailing commission. Do these customers no longer need advice and service ? The reality is that the big institutions can do no more than treat customers like numbers. It is the army of advisers that provide the personal service that clients desperately need. NAB failed at wealth management that is clear. What is worse is their failure to acknowledge the successes of financial advisers before the bank entered wealth management and to use this announcement to support their continued success to avoid them all being scarred by the same brush.
Read the article Johny, its only salaried advisers. This will have no impact on the advisers, its just shuffling money from one pool in the bank to another.
Read the article Anonymousy, “”NAB said it supports a complete move away from grandfathered commissions at an industry level” so it wont be long before good independent advisers and their clients are affected.
Agreed David and in doing so they have included us as collateral damage in the mess they created
What an absolute and utter joke this hypocracy is!
This doesn’t effect me in anyway but if the NAB senior executive management are 100% fair dinkum about their claims of building trust and looking after their customers, then maybe they should also pay back back the millions of dollars in bonuses they reaped from the pressure they forced upon their FP’s to push on their clients in the first place!
Likelihood though……ZIP!
So the banks screw up and the industry super funds continue to lie and mislead in their advertising and yet they both come out as the self righteous voice of the super industry ?
Nice work NAB. You along with your other cohorts, have fleeced the industry and the consumer for far too long and only now you decide to “look after the customer”……….Pfft…
As an ex salaried NAB adviser they actually turned all trailing commissions off for advisers back in 2015.
As an ex salaried NAB adviser they actually turned all trailing commissions off for advisers back in 2015.
Yes and kept the commission themselves without doing any work!
What makes this even more astounding is that NAB have been quite happy to put this turned off trailing commission that was charged to clients but not paid to advisers in their own pockets for the last 3 years – until we have a Royal Commission. Now they are on a crusade? Really? Please. After 25 years hard not to be cynical about the rather convenient timing of this supposed mea culpa
Exactly!
So where did the trail commissions go ?? back to the clients Ha ha I am sure the NAB retained them
Correct, for a few years they stopped paying advisors the money as it was “unethical” but didn’t rebate a dollar. There were also many fee paying clients unassigned for long periods of time as well, so lots of this “fee for no service” had nothing to do with advisers not doing their jobs either.
Well done – another step forward for the industry. We’ll get there!