The media exposé also revealed the bank had sacked 37 planners for misconduct and sparked ASIC's review into the bank's management of its financial planning arms. ASIC said NAB's Financial Advice Customer Response Initiative (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 co-operation 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. "It's important for our customers that we undertake this review in a thorough manner – and we will," Mr Hagger said. 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. NAB Wealth group executive Andrew Hagger said NAB will be writing to customers through a staged process as it continues its review of advice files. After the recent scandals in financial advice, the government this week promised to introduce new minimum standards for advisers, and beef up the powers of the corporate regulator. Subject to transitional arrangements for the industry, advisers will be required to hold a degree, pass an exam, and agree to a code of ethics. with Clancy Yeates Sarah Danckert is a business reporter.
National Australia Bank (NAB) is setting up a formal remediation program aimed at compensating clients who received poor financial advice from its representatives, following pressure from the regulator, Australian Securities and Investments Commission (ASIC), and the public. The bank has also paid AUD 1.7m ($1.2m) in compensation to 750 customers since February, on top of the $15m ($10.8m) paid out to 87 customers in the preceding five years. ASIC said in a statement that it will "ensure that the CRI will provide a fair and effective mechanism for customers to be properly compensated".