NAB was working on compliance upgrade
Documents tabled in the Parliament reveal that National Australia Bank (NAB) knew that a risk existed that its actions in parting company with 31 advisers over two years would come to the attention of either politicians or the media.
The document, tabled by NSW National Party Senator, John Williams last week, not only revealed the degree to which NAB was trying to benchmark and upgrade its compliance structures in the context of the problems which had impacted the Commonwealth Bank but it also acknowledged the risks entailed in the process.
The document also reveals that NAB's 2009/10 acquisition of Meritum Financial Group was problematic with six of the 31 terminations undertaken by the bank relating to Meritum advisers — something which gave rise to urgent work on Meritum's advice compliance framework.
The documents, a NAB Wealth Advice Review, actually served up the names of the more notable advisers with which it had parted company over the years, including that of Storm Financial boss, Emmanuel Cassimatis, "an MLC Agent" with whom it had parted company in the 1990s.
The document, originated in August last year at the height of the problems confronting the Commonwealth Bank, noted the number of advisers with which NAB had parted company and those which had been high income earners and pointed to "phase 2" within which it would conduct "additional targeted reviews and/or enhance our adviser risk profiling matrix".
"This will include other dimensions such as higher revenue earners, unusual revenue activity and higher client loads," it said.
"While there is no regulatory supervision or review required, the existence of these cases means there is a risk, should they come under political or media attention, that links could be made to the CBA situation," the NAB document said.
In a series of next steps outlined in the document, the NAB was moving to accelerate the integration of Meritum's advice compliance framework within NAB Wealth and to "refresh whistleblower communications across NAB Wealth".
Recommended for you
ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
