The Royal Commission referred today to a breach report concerning 325 NAB staff, including 204 financial advisers, who were involved in incorrectly witnessing client forms. This finding came out of a line of questioning involving a particular adviser, Bradley Meyn, who failed on multiple occasions to have non-lapsing binding death benefit nominations correctly witnessed - that is, in the presence of the actual client.
Meyn was contacted and asked to respond to these allegations, during which point he was suspended. After a period of investigation, Meyn's employment was terminated on the basis that he "deliberately falsified details" on those forms and that he had breached NAB's code of conduct and licensee standards.
NAB did not report Meyn's conduct to the association of which he eventually became a member, the FPA. NAB chief customer officer - consumer and wealth Andrew Hagger said this was because "our focus was on the employment disciplinary procedure which led to [Meyn's] termination."
Hagger referred to "three limbs of discipline" - Internal employment procedures, regulatory procedures (providing notifications to ASIC) and then professional association discipline. The latter was considered to be a lesser priority at the time, although Hagger said this has since been remedied.
When Meyn's conduct was originally reported to NAB's breach review committee, NAB general manager, risk, wealth advice Luke Haworth-Booth did not consider Meyn's conduct a serious compliance concern in ASIC's view.
Hagger disagreed with this finding and told Senior Counsel Assisting Rowena Orr that he notified Haworth-Booth of this at the time, but that this "confusion" stemmed out of a limited understanding as to what constituted serious compliance concerns back then.
Orr then referred to a memo by NAB Financial Planning general manager Tim Steele which suggested NAB had since identified "a number of instances of NAB employees incorrectly witnessing statements."
Steele found employees thought such behaviour was "common practice and acceptable," both at NAB and at non-NAB licensees, and that they did not understand the serious of these actions.
Hagger said this concerned him very much, adding that "in relation to the financial advice area, there was a failure of discipline."
Ultimately, though, Hagger said the correct preparation of witness forms was not considered as part of compliance training, simply because the forms were clear as to what was required.
When the 325 NAB employees who were involved in the incorrect witnessing of forms were raised by Orr, she asked whether this raised concerns about NAB licensees' supervision and monitoring processes. Hagger agreed.This article was first published by http://www.financialstandard.com.au
Author: ALEX BURKE