ASIC obliges NAB to correct information to wealth clients
National Australia Bank has been obliged to issue a corrective disclosure notice to its planning customers.
The Australian Securities and Investments Commission (ASIC) announced today that an investigation of a number of advice licensees within the NAB Group had revealed a failure to disclose relationships between advisers, advice licensees, and other members of the NAB Group that issue investment products.
It said this non-disclosure occurred when customers were advised to acquire products issued by NAB Group-related firms, including MLC-branded products. Customers were provided with Statements of Advice (SoAs) and Financial Services Guides (FSGs) by their financial advisers that did not fully disclose the connection between each customer's adviser, the advice licensee, and recommended investments.
Disclosing associations or relationships between advisers, employers, authorising licensees and issuers of financial products to customers in FSGs and SoAs is required under the Corporations Act.
At least 150,000 customers received deficient disclosure either in SoAs or FSGs in relation to MLC-branded products and boutique investment manager products.
The defective disclosure occurred following a failure to update template documents due to a process error.
The licensees investigated by ASIC were:
- National Australia Bank Limited;
- Godfrey Pembroke Limited;
- Apogee Financial Planning Limited;
- GWM Adviser Services Limited;
- Meritum Financial Group Pty Ltd; and
- JBWere Limited.
The regulator said that following discussions between ASIC and the NAB Group, customers who invested in MLC-branded products will receive corrective disclosure when they log in to their accounts on the MLC website for a three month period.
It said NAB has also agreed to write to the remainder of affected customers currently invested in related products, explicitly acknowledging the issue and providing corrective disclosure.
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