- Sarah Danckert
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NATIONAL Australia Bank has bowed to regulatory and community pressure and set up a formal remediation program aimed at compensating clients who received poor financial advice from its representatives.
From this Wednesday, NAB will be contacting customers who may have been victims of poor advice since 2009, the corporate watchdog said in a statement.
According to the Australian Securities and Investments Commission, affected NAB clients will have their files reviewed to determine if compensation should be paid.
In February, Fairfax Media revealed the bank had allegedly created a culture that financially damaged hundreds of customers through financial advisers accused of engaging in misconduct, forgery and fraud in relation to consumer loans made by NAB. The media exposé also revealed the bank had sacked 37 planners for misconduct and sparked ASIC's review of the bank's management of its financial planning arms.
ASIC said NAB's "Financial Advice Customer Response Initiative (or 'CRI')" would be a "large review and remediation program for customers affected by non-compliant advice".
"ASIC will ensure that the CRI will provide a fair and effective mechanism for customers to be properly compensated," the ASIC statement said.
An external consultant will report its findings to ASIC on the progress of the NAB remediation program.
ASIC acknowledged NAB's co-operation in this matter.
Fairfax Media has also revealed the depths of the cooperation between the regulator and NAB, with evidence showing ASIC allowed NAB to sign off on its press releases pertaining to the compensation of clients affected by NAB Wealth's "system error" in its Navigator platform.
NAB's remediation program comes as the Commonwealth Bank of Australia slowly works through its remediation program for victims of poor financial advice.
So far, only 19 of the 8835 customers who have requested their files be reviewed have been compensated through the CBA program which was set up in July 2014.
