The National Australia Bank has backed all financial advice recommendations in the Hayne final report but is also reviewing its stance on some other recommendations.
In a statement to the ASX, NAB group chief executive Philip Chronican said NAB supported 72 of the recommendations in the Hayne final report, including agreement with all 10 recommendations on financial advice.
On annual renewal and payments, it said NAB Financial Planning’s salaried channel will implement 12-month agreements on 1 April 2019 in place of ongoing fee arrangements (OFA).
The 12-month agreement will be offered in place of the current OFA to new clients and all existing clients on their next review.
NAB also remained committed to its removal of grandfathered commissions as it moves to a fee-for-service model, with the NAB Financial Planning salaried channel turning off grandfathered commissions and the benefit being passed through to clients via a rebate or a fee reduction effective 1 January 2019.
On the other hand, Mr Chronican said he would work with government and regulators with a view to taking positive action as quickly as possible on the remaining four recommendations relating to broker arrangements, definition of small business and Banking Executive Accountability Regime (BEAR) accountabilities.
NAB did not explicitly agree with Recommendation 1.3 on mortgage broker remuneration and Recommendation 1.5 on mortgage brokers as financial advisers.
It said its position on those recommendations was that it will “work with the Treasury-led working group to ensure that the broking industry remains viable, customers have choice and get the best possible outcomes”.
NAB also didn’t explicitly agree with Recommendation 1.10 around the definition of ‘small business’, as well as Recommendation 1.17 on BEAR accountabilities.
It said it is intent expanding its definition of small business from entities with aggregate borrowings of less than $3 million to aggregate borrowings of less than $5 million.
On BEAR accountabilities, NAB said it has allocated responsibility to specific accountable persons for each step in the design, delivery and maintenance of all products offered to customers by NAB and any necessary remediation of customers in respect of those products.
Further, NAB said it will address this recommendation, in consultation with APRA, as part of any regulatory change.
Mr Chronican said the Hayne final report recommendations will help lead to a “better, more customer-focused industry as organisations change in response.
“The commission has also rightly challenged NAB to close the gap between where we are today and where we need to be,” he said.
“We have to focus on earning back trust and this includes the actions we take in response to the final report and other issues we have faced at NAB.
“It includes how we compensate customers when we get it wrong; how we pay our people; how we hold ourselves accountable for running the bank; and how we build a culture that puts customers first every time.”
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