The parliamentary hearing follows demands from the Australian financial services regulator to the country’s ‘Big Four’ banks and its leading wealth manager AMP to repay at least A$178m to more than 200,000 customers after charging for financial advice they did not receive.
The Australian Securities and Investments Commission (Asic) found that 220,000 NAB member accounts were incorrectly charged planned service fees of approximately A$34.7m between September 2012 and October 2016.
The Commonwealth Bank of Australia, ANZ, NAB, Westpac and AMP control the bulk of the financial advice available within the country.
Top dog pay rise
When asked at the hearing whether any senior executives had been sacked over the scandal, NAB’s chief executive Andrew Thornburn said two executives had left, but he was unsure whether they had been sacked or had gone of their own accord.
However, he added that many lower level financial planners had been sacked after a series of scandals, maintaining that 99% of advisers “are doing the right thing”.
“There have been 55 planners that we have terminated because of poor conduct between 2009 and 2015.
“In that time, we have 4,400 planners. So 55 is too many, not good enough but it’s in the context of 4,400 people, 99% of them are doing the right thing,” said Thornburn.
Thornburn also admitted that the head of the wealth management division, Andrew Hagger, had received 120% of his bonus last year, as well as a 36% increase in total salary.
Thornburn defended Hagger’s pay rise, added “he did a very good job last year”.
Westpac in court
In December, Asic took legal action against Westpac for giving financial advice that failed to put the “best interests” of its clients first.
The bank and its subsidiary BT Funds Management appeared in court for failures relating to the firm’s cold calling sales practice.
During telephone campaigns, Westpac and BT provided personal recommendations to customers, urging them to switch their existing pension pots – known as super funds – from other providers into Westpac’s super accounts. This is despite the advice not being in the best interest of the client.
