Did NAB appropriately breach report?
Serious questions have been raised about whether National Australia Bank (NAB) appropriately fulfilled its breach reporting obligations to the Australian Securities and Investments Commission (ASIC) with respect to 37 planners who either resigned or were force to leave the big banking group over bad advice issues.
The questions have been raised in circumstances where senior ASIC officials including the chairman, Greg Medcraft and the deputy chairman, Peter Kell, were unable to definitively declare whether breach notices had been received from NAB about any of the planners who had parted company with the bank.
The absence of breach notifications would cast a pall over the efforts NAB made to address the problems of advice including parting company with some advisers and ensuring that affected clients were compensated.
However in evidence before the Senate Economics Committee late yesterday, ASIC was making clear that it was having difficulty in determining whether breach reports had been filed with respect to planners named in a whistle-blowing document relating to NAB.
Kell told the committee that the regulator had been unaware of the whistle-blowing document (tabled by NSW National Party Senator, John Williams) and that a whistle-blower had not come forward to ASIC.
Medcraft, Kell and other ASIC officials found themselves under heavy pressure by both Government and Opposition senators over the regulator's handling of the NAB issue with NSW Labor Senator, Sam Dastayari, suggesting that the NAB issues were very reminiscent of the problems which had beset Commonwealth Financial Planning.
In his opening address to the Senate Committee, Medcraft suggested that the regulator had only become aware of the problems at NAB as a result of media coverage, saying that its actions were based on weekend newspaper reports.
"We have started our information gathering from NAB Wealth using our formal legal powers. And the bank has been cooperative," he said. "ASIC has also initiated discussions with NAB Wealth about reviewing remediation provided to financial advice clients."
"I do not propose to comment further as these processes are at an early stage, but I wish to reassure the Committee that we have acted as soon as possible to ensure we can consider all allegations and issues raised."
Recommended for you
As advisers risk losing two-thirds of FUA during the $3.5 trillion wealth transfer, two co-founders underscore why fostering trust with the next generation is vital to retaining intergenerational wealth.
As advisers seek greater insights into FSCP determinations, what are the various options considered by the panel and can a decision be appealed?
Amid the current financial adviser shortage, advice firm Link Wealth is looking to expand its financial literacy program for high school students across the country.
TAL Risk Academy has updated its range of ethics courses to help financial advisers meet their CPD requirements following adviser feedback, including interpreting FSCP determinations.
