Thorburn highlights overhaul to fix mistakes

07-Oct-2016

By Daniel Paperny

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The National Australia Bank (NAB) internal monitoring framework for ensuring adviser compliance was “not up to scratch” over the past few years, admitted NAB chief executive Andrew Thorburn.

But the bank has since overhauled processes and operations to bolster the professionalism of its adviser network, he added.

Appearing on the third day of a federal parliamentary inquiry into Australia’s four major banks, Thorburn said the bank had taken stock of its past errors and “sought to improve processes and operations” as a result.

“We now have initial checks and balances, more compliance reviews and we’ve definitely stepped that up,” he said.

“We’ve learnt from our mistakes in those years [and] today I’m really confident that we’re doing a lot more to protect our clients.”

Thorburn confirmed that 43 financial advisers had been dismissed from the bank as part of ASIC’s ongoing Wealth Management Project investigation, begun two years ago, into misconduct in the major institutions.

However, he said this issue should not be seen as “systemic”, given that the bank’s total adviser network numbered 1700 planners.

The bank had complied with the ASIC directive to take appropriate measures in the dismissal of the 43 advisers, he said, in addition to undertaking “a number of incentive reductions or non-payments” for senior executives in its wealth management arm who had overseen the advisers in question.

Thorburn noted the bank would continue to implement its Customer Response Initiative to address past instances of bad advice, as well as announce the progress it was making in addressing internal misconduct.

"The vast majority of planners are doing the right thing,” Thorburn said.

“The main point here is that there was no systemic issue. We have individuals who are not playing by the rules and the values that the company set.”

In July last year, NAB announced it would pay 62,000 wealth customers who had accounts on its Navigator Wrap platform a total of $25 million in compensation, after internal errors resulted in clients being paid less than they were due.

Commenting on the incident as well as the bank’s ongoing issues with advice, Thorburn said he believed they represented one-off errors.

“Looking at the overall [wealth management] part of the business … we have had these isolated cases, we have owned up to them and we are addressing them,” Thorburn said.

“As I look forward, I think that we have significantly strengthened our controls and we have significantly strengthened our governance.”

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