Evidence of misconduct by financial planners at National Australia Bank prompts senators to push for wider inquiry into wrongdoing across financial sector
A royal commission should be held into white collar crime, two Coalition senators said, as a Senate inquiry heard evidence of financial misconduct within National Australia Bank (NAB).
The Senate economics committee on Friday heard from Veronica Coulston, a single mother who racked up thousands of dollars in debt due to bad advice from a NAB financial planner who was subsequently sacked.
Coulston invested a small amount of money left to her after her father’s death on the say-so of planner Graeme Cowper in 2005. It took her six years to convince the bank to pay her $80,000 in compensation.
“No, they’ve never apologised,” Coulston told the inquiry. “I don’t think they know what an apology is, really.”
“It’s the higher people who aren’t even taking notice [of misconduct], and it’s really unfair.”
Group executive of NAB Wealth, Andrew Hagger, agreed that the bank was “demonstrably not there for Ms Coulston”, but said that it was focused on compliance with financial laws.
Hagger said the bank had sacked 31 financial advisers for a number of reasons, including misconduct and non-compliance.
“Where there has been financial misconduct over the last five years, we will write to clients,” Hagger said.
He said that the bank had undertaken an inquiry into inappropriate financial advice.
“We are not resting on our industry position laurels,” Hagger said, adding that he understood that community trust was vital.
But the multi-party senators conducting the inquiry said that was not good enough.
“You’re doing your own reviews, by your own people, and you won’t tell customers,” Labor’s Sam Dastyari said.
Dastyari said that until an independent review was conducted, “everything you’re saying is trust me, trust me”. He said if NAB had nothing to fear then it should accept an independent inquiry.
Commonwealth Bank whistleblower Jeff Morris said the big six banks were “left to their own devices” because the Australian securities and investment commission (Asic) failed in its oversight responsibilities.
“Asic missing in action is the biggest scandal of all,” Morris told the inquiry.
He said the numerous leaks relating to the inappropriate behaviour of financial planners pointed to a “deeper systemic problem” of Asic’s “lethargy and complacency”.
Members of the Senate economics committee said white collar crime was widespread.
Two Nationals senators – John Williams and Matt Canavan – have called for a royal commission.
“We do need a royal commission to make sure we get to all of these issues so I fully support Senator Williams’ call for it,” Canavan said.
Greens senator Peter Whish-Wilson and Dastyari also want one.
“Asic doesn’t have the resources to properly investigate even these kind of scandals that we’re looking at now, how will we ever get to the bottom of it without the powers and the resources of a royal commission?” Dastyari asked.
The NAB inquiry comes off the back of a similar investigation of Commonwealth Bank financial planners.
The Coalition introduced regulations to water down Labor’s Future of Financial Advice (Fofa) laws which, among other measures, made it mandatory for financial advisers to act in their clients’ best interest.
The Fofa amendments were subsequently disallowed by the Senate in November last year, when Labor, the Greens and key crossbenchers voted together.Author: Shalailah Medhora
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