National Australia Bank has admitted to compensating more than 750 customers between $10 and $15 million over the last five years, in response to the bad behaviour of a number of its financial advisers.
The admission came after it emerged on Saturday that the bank had suspended, fired or “secured” the resignation of 31 NAB advisers over two years.
An internal document dated August 2014, and leaked to Fairfax, said these advisers were fired or suspended for “conflicts of interest, inappropriate advice, inappropriate practices or serious repeat compliance breaches.”
This puts NAB in the company of Commonwealth Bank, Macquarie and ANZ, which have all been rocked by advice scandals in the last couple of years.
NAB quickly responded to the reports on Saturday. While distancing itself from the actions of its corrupt advisers, NAB Wealth group executive Andrew Hagger opted for a contrite rather than defiant tone.
“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,” he said.
“We have over 1.7 million customers and clearly we want our customers to get the right advice and good advice every time. But where we have problems we will face into them and fix them.”
He said NAB Wealth takes the issue of corrupt behaviour “very seriously”, and had been “transparent with this information, with our senior management team, the NAB Principal Board and our regulators.”
But NAB’s assurances are unlikely to comfort critics of the financial advice industry.
Nationals Senator John Williams is in the process of drawing up a draft terms of reference for a royal commission into white collar corruption, with a heavy focus on dodgy financial advice.
While Senator Williams has not yet canvassed MPs for their support, his office said the NAB scandal is likely to increase support for a royal commission.