As the royal commission heard evidence against NAB and ANZ, a class action against AMP was being investigated
National Australia Bank’s top executives complained about having
their bonuses “shaved” after it was discovered hundreds of NAB employees
under their charge had been falsifying client documents.
One NAB executive argued it would send the wrong message to NAB’s leadership team and encourage them to sweep future scandals under the carpet.
It has also been revealed a former ANZ financial adviser advised his clients to invest in a luxury marina apartment for $1.6m through their self-managed super funds, but when it failed to sell he siphoned off $100,000 and ANZ declined to compensate his clients.
And the inquiry heard a client would have lost $500,000 in superannuation if she had followed the advice of a celebrity adviser whose staffer impersonated her on phone calls.
They were among damning revelations heard at the banking royal commission on Tuesday.
As they were being aired, the law firm Slater and Gordon announced it
was partnering with global litigation funder Therium to investigate a
major investor class action against AMP after more than a billion
dollars was wiped from AMP’s market value after it admitted to lying to
the regulator.
On Tuesday, the banking royal commission heard that a former NAB financial adviser, Bradley Meyn, had lost his job in 2016 after doctoring a client’s documents, but that further investigations led NAB to discover the practice was widespread among NAB staff.
An internal NAB review in early 2017 found 353 NAB staff had falsely witnessed the signing of client documents, despite not being present during client meetings, to help colleagues who had failed to properly complete financial forms for their clients.
The NAB executive Andrew Hagger admitted on Tuesday that a culture had developed in part of NAB whereby document falsification was “common practice”, and said staff likely felt they were helping their clients by speeding up the document signing process.
He said more than 2,520 NAB customers were affected, and the bank had written to all customers involved but had had difficulty reaching 30 people.
Hagger also revealed that senior NAB executives were upset that their bonuses would be “shaved” after the scandal was discovered, given they were not directly involved.
Senior counsel assisting Rowena Orr read an internal note from Tim Steele, the general manager of NAB financial planning, in which Steele expressed concern that the leadership team’s morale would suffer if their bonuses were cut.
In the note from Steele to Greg Miller, the head of NAB’s wealth advice, Steele complained: “In terms of the broader leadership team, I am concerned about the cultural impact to both overall engagement and the potential reluctance of team members to raise future issues which could contravene NAB’s whistleblower policy given the likely perceived unfairness of the consequences and corresponding lack of trust in senior leadership to support our people.”
Orr asked Hagger: “So this was Mr Steele expressing concern about consequences imposed at the leadership level in response to these incidents?”
Hagger replied: “Yes.”
Orr asked: “And Mr Miller expressed a similar view in his discussions with you?”
Hagger replied: “Yes.”
Hagger said he told Miller if bonuses were slightly smaller for one year it wouldn’t matter.
Steele’s bonus was shaved by approximately 10%, while Miller received no bonus. The NAB chief executive, Andrew Thorburn, agreed the bonus cuts were sufficient.
Hagger said his own bonus was reduced slightly, by $60,000, leaving him with a $960,000 variable bonus last year.
Donna McKenna rejected the advice of the planner Sam Henderson, whose regular media appearances include hosting a TV finance show.
A staffer of his advice firm Henderson Maxwell impersonated McKenna on a number of phone calls to gain information from her super fund, with recordings of two calls played to the banking royal commission on Tuesday.
McKenna complained to the Financial Planning Association in March 2017 about the advice.
The commission heard Henderson described McKenna as an aggressive lawyer and said it was a “storm in a teacup”.
He also asked the FPA not to share his response with McKenna as she would find being labelled “nitpicking” inflammatory.
Senior counsel assisting the commission, Rowena Orr QC, asked: “Mr Henderson, is it really nitpicking for Ms McKenna to make a complaint after receiving advice that if implemented would have cost her half a million dollars?”
Henderson replied no.
The Henderson Maxwell chief executive has hosted a TV show on Sky News Business and regularly appears as a finance expert on Network Ten’s The Project and the Nine Network’s Today program.
He also regularly writes general financial advice articles for a number of publications including the Australian Financial Review.
One NAB executive argued it would send the wrong message to NAB’s leadership team and encourage them to sweep future scandals under the carpet.
It has also been revealed a former ANZ financial adviser advised his clients to invest in a luxury marina apartment for $1.6m through their self-managed super funds, but when it failed to sell he siphoned off $100,000 and ANZ declined to compensate his clients.
And the inquiry heard a client would have lost $500,000 in superannuation if she had followed the advice of a celebrity adviser whose staffer impersonated her on phone calls.
They were among damning revelations heard at the banking royal commission on Tuesday.
On Tuesday, the banking royal commission heard that a former NAB financial adviser, Bradley Meyn, had lost his job in 2016 after doctoring a client’s documents, but that further investigations led NAB to discover the practice was widespread among NAB staff.
An internal NAB review in early 2017 found 353 NAB staff had falsely witnessed the signing of client documents, despite not being present during client meetings, to help colleagues who had failed to properly complete financial forms for their clients.
The NAB executive Andrew Hagger admitted on Tuesday that a culture had developed in part of NAB whereby document falsification was “common practice”, and said staff likely felt they were helping their clients by speeding up the document signing process.
He said more than 2,520 NAB customers were affected, and the bank had written to all customers involved but had had difficulty reaching 30 people.
Hagger also revealed that senior NAB executives were upset that their bonuses would be “shaved” after the scandal was discovered, given they were not directly involved.
Senior counsel assisting Rowena Orr read an internal note from Tim Steele, the general manager of NAB financial planning, in which Steele expressed concern that the leadership team’s morale would suffer if their bonuses were cut.
In the note from Steele to Greg Miller, the head of NAB’s wealth advice, Steele complained: “In terms of the broader leadership team, I am concerned about the cultural impact to both overall engagement and the potential reluctance of team members to raise future issues which could contravene NAB’s whistleblower policy given the likely perceived unfairness of the consequences and corresponding lack of trust in senior leadership to support our people.”
Orr asked Hagger: “So this was Mr Steele expressing concern about consequences imposed at the leadership level in response to these incidents?”
Hagger replied: “Yes.”
Orr asked: “And Mr Miller expressed a similar view in his discussions with you?”
Hagger replied: “Yes.”
Hagger said he told Miller if bonuses were slightly smaller for one year it wouldn’t matter.
Steele’s bonus was shaved by approximately 10%, while Miller received no bonus. The NAB chief executive, Andrew Thorburn, agreed the bonus cuts were sufficient.
Hagger said his own bonus was reduced slightly, by $60,000, leaving him with a $960,000 variable bonus last year.
Celebrity adviser ‘impersonated client’
The inquiry also heard evidence that a commissioner with Fair Work Australia would have lost $500,000 in superannuation if she followed the advice of a firm whose staffer impersonated her on phone calls.Donna McKenna rejected the advice of the planner Sam Henderson, whose regular media appearances include hosting a TV finance show.
A staffer of his advice firm Henderson Maxwell impersonated McKenna on a number of phone calls to gain information from her super fund, with recordings of two calls played to the banking royal commission on Tuesday.
McKenna complained to the Financial Planning Association in March 2017 about the advice.
The commission heard Henderson described McKenna as an aggressive lawyer and said it was a “storm in a teacup”.
He also asked the FPA not to share his response with McKenna as she would find being labelled “nitpicking” inflammatory.
Senior counsel assisting the commission, Rowena Orr QC, asked: “Mr Henderson, is it really nitpicking for Ms McKenna to make a complaint after receiving advice that if implemented would have cost her half a million dollars?”
Henderson replied no.
The Henderson Maxwell chief executive has hosted a TV show on Sky News Business and regularly appears as a finance expert on Network Ten’s The Project and the Nine Network’s Today program.
He also regularly writes general financial advice articles for a number of publications including the Australian Financial Review.
The royal commission also heard evidence from Kieran Forde, ANZ’s head of wealth solutions and partnerships.
He was asked about a financial adviser, working for ANZ’s Millenium3, who convinced clients to invest in property but used their money through his own company to purchase the property.
Forde admitted that ANZ failed to conduct any detailed investigation of the financial adviser, despite receiving the formal complaint in 2013 and being in possession of two earlier audits that raised concerns about his behaviour.
When asked if the financial adviser’s misconduct should have been identified earlier, Forde said it should have. Orr asked: “So ANZ elected not to take an investigation in 2013 or to contact any of the other customers who were in the same position as the customers who had made the complaint?
Forde replied: “It appears so, yes.
Orr asked why, and Forde responded: “The only logical reason is that the commercial interests of Millennium3 took [precedence]”.
Orr: “Over the interests of the clients?”
Forde: “Yeah, I think that’s fair.”
With Australian Associated Press
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