National Australia Bank has apologised to at least 150,000 customers for failing to disclose that its advisers were cross-selling the bank’s products.
The bank on Friday issued an apology and made a “corrective disclosure” to customers about the relationship between its advisers, its financial advice licensees and the recommended investments, following an investigation by the corporate regulator.
The Australian Securities and Investment Commission has found that NAB’s financial advisers were recommending products to customers without disclosing that these were issued by the group’s firms, including its MLC wealth management unit.
While customers were issued statements of advice and financial services guides, these failed to fully disclose the connection between the adviser, the financial advice licensee and the investment products, ASIC said.
Financial institutions are required to disclose that information under the Corporations Act.
In response, NAB says it had failed to update template documents its financial advisers gave to customers between 2007 and early 2016 so that they included details of new investment managers the group had acquired or taken a shareholding in.
The bank also said it had issued statement of advice templates between 2012 and 2016 referring customers to the Financial Services Guide for full disclosures of relationships, but admitted it should have included the full details.
“We apologise to our customers, and want to assure them that they did not impact the quality of advice they received from their adviser, and there is no impact on their investments or portfolios,” NAB’s executive general manager of Wealth Advice Greg Miller said in a statement.
Customers who invested in MLC-branded products will receive corrective disclosure for a three-month period when they log in to their accounts on the MLC website.
NAB has also agreed to write to the rest of the affected customers currently invested in related products, explicitly acknowledging the issue and providing a corrective disclosure.