(1).jpg)
By
Commissioner Hayne has floated the question on whether or not NAB superannuation trustee NULIS may have acted criminally over its alleged part in the “fees for no service” scandal that has rocked the financial industry.
The commission is currently in its fifth round of public hearings, which will conclude on 17 August. The current round is shining a spotlight on alleged misconduct in the superannuation industry.
A 2016 report by ASIC revealed that some of Australia’s major financial firms failed to deliver ongoing advice to clients who were charged fees for those services.
On 8 August, the commission heard from Nicole Smith, former chair of NULIS. Smith said that NULIS’ board of trustees and NAB’s wealth management division had been discussing in 2016 the possibility of taking enforcement actions from ASIC, or having NULIS’ license conditions changed.
“We weighed up, kind of, the benefits of – or the perceived views of either an enforceable undertaking– or licence conditions. Essentially, they meant we would do exactly the same thing. One just imposed licence conditions on it – on us and the other would have been called an enforceable undertaking,” Smith said in response to questions from the commission’s counsel assisting Michael Hodge.
In February 2017, ASIC imposed licence conditions on NULIS that required the superannuation trustee to engage an ASIC-approved independent expert to assess and report on the adequacy of its compliance and risk management practices for its retail and wrap superannuation funds.
Smith stressed the board “absolutely did not” regard themselves as getting of lightly. But, she couldn’t recall having to contemplate at the trustee level, the possibility that they might face a civil proceeding.
“Did you think yourself that taking money to which there was no entitlement raised a question of the criminal law?” Hayne asked. Smith replied: “I didn’t.”
As of December 2017, ASIC’s figures show NAB had either paid or offered compensation worth $5.4m, while the bank’s superannuation trustee NULIS had either paid or offered $35.9m.
According to figures from Hodge, Australians had superannuation savings comprising approximately $2.6tr of assets as of March this year. That is equivalent to approximately 144% of the country’s nominal gross domestic product.
Additional data from Hodge show that superannuation now comprises around 50% of total household financial assets. As of December last year, superannuation was the second largest sector in the financial system by asset size, accounting for about 29% of Australia’s financial institutions’ assets.
On 8 August, NAB CEO took to Twitter to apologise for the revelations of the commission: “This week we’ve been confronted at the royal commission with examples of where we have failed to serve our customers with honour. I’m sorry. And my commitment is that we will learn and get better, so we can once again be a bank you respect and trust.”
