MLC adds up cost of miscalculation blunder

MLC is counting the cost of an internal system error that has resulted in the overpayment of commissions to financial planners, with preliminary estimates indicating the miscalculation will cost the firm upwards of $1 million.

The embarrassing headache relates to MLC Wealth Protection and involves renewal commissions for some advisers writing risk business to a life insurance product, Life Cover Super.

The incorrectly calculated commission payments, which were unearthed following an internal audit of MLC Wealth Protection and its risk insurance operations, have been ongoing over a “a couple of years” and affect “a few thousand” advisers according to an MLC spokesperson.

The group has written to advisers who could be affected, requesting they provide paperwork to verify the level of commissions they were contracted to receive.

However, the spokesperson added that the group, in a goodwill gesture, would not be asking advisers to repay any excessive commissions.

“An error of incorrect payments was identified and we are taking the necessary steps to address the situation,” he said.

The spokesperson was unable to provide a definitive amount in relation to the loss. However, it is believed the figure will be over $1 million.

Meanwhile, National Australia Bank (NAB) announced last week that MLC chief executive Peter Scott will depart in the new year as a result of a reshuffle to give its wealth management arm a more regional focus.

As part of the changes, the head MLC role in Australia has been given to MLC chief executive of retail investments Steve Tucker, but he will not have responsibility for the wealth management group globally.

Instead, each regional wealth management head will report to their local representative of the bank.