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| Banking royal commission: falsifying forms 'common practice' at NAB – live | |
| (35 minutes later) | |
| NAB’s chief risk officer did not share the findings of his external report with Hagger but did share it with other areas of the bank. Hagger says: | |
| I was surprised he did not share this with me. We talk maybe three times a week, the CRO and myself. He has enormous influence inside the bank, as he should. His answer to me was that actually this helped him keep watch in the progress that we were making. | |
| The royal commission has heard NAB’s chief risk officer commissioned an external report on ethics within the bank, less than a year before it was revealed that Meyn was falsifying nomination forms. | |
| The report was scathing of NAB’s approach. It found it was rare for anyone to be fired for ethical breaches. This created a lack of visible personal consequences for improper behaviour, removing any deterrent for NAB employees. | |
| Orr asks whether Meyn’s behaviour was caused by NAB’s approach to its employees: | |
| Was it caused by NAB’s failure to ensure its employees understood their ethical obligations? | |
| Hagger replies: | |
| No I don’t think so. | |
| Just a note on the context of this evidence. The royal commission has heard that 353 NAB employees have been involved in incorrectly witnessing binding beneficiary nomination forms for superannuation funds. That could affect the validity of nominations made by 2,520 customers. | |
| Essentially, NAB client service officers were witnessing forms relating to estate planning, despite not being present during meetings with clients. If the forms were invalid, it would likely mean that death benefits could not be distributed according to the client’s wishes | |
| It was a significant breach of the ethical and legal obligations of NAB workers. | |
| The forms expressly stated they were not to be witnessed unless the signatory was present at the time of the client meeting. | |
| Yet, the royal commission has just heard this was “common practice” at NAB. Orr asks Hagger whether that concerned him. | |
| Hagger said: | |
| Yes, it concerned me very much. | |
| Orr pressed Hagger on the point: | |
| If this was the common practice, what does it say about the ethical standards of NAB employees? | |
| Hagger responds: | |
| What it says is that in relation to the financial advice area, there was a failure of discipline. That’s what I told the board. | |
| I believe that the client service officers and the advisers concerned thought they were taking a shortcut in the interest of the client, yet it’s very stark on the form that you either witness the form when you’re present, or you don’t. | |
| He goes on to concede there was a failure of culture within NAB. | |
| Orr is now asking why NAB didn’t report Meyn to the corporate regulator, Asic, earlier, given his conduct raised “serious compliance concerns”. | |
| Hagger says Meyn was later reported to Asic. But he conceded it should have been done earlier. | |
| Knowing what I know now, and really knowing what I knew from Asic on 1 April, he should have been reported at that time. | |
| Hagger is being questioned about a NAB financial adviser, Bradley Meyn, and his deliberate falsification of client death benefit forms. Meyn had a colleague wrongly witness the form, after failing to get a proper witness when he met with his client. | |
| The actions breached the bank’s code of conduct and regulatory obligations. They also placed customers at significant financial risk. | The actions breached the bank’s code of conduct and regulatory obligations. They also placed customers at significant financial risk. |
| Meyn was fired. But NAB did not notify the Financial Planning Association (FPA), the relevant financial adviser professional body. | Meyn was fired. But NAB did not notify the Financial Planning Association (FPA), the relevant financial adviser professional body. |
| Rowena Orr says that simply allowed the financial adviser to go and work elsewhere, without consequence. | Rowena Orr says that simply allowed the financial adviser to go and work elsewhere, without consequence. |
| Hagger said he was focused on disciplining the employee internally. | Hagger said he was focused on disciplining the employee internally. |
| I’ve reached the point that I have agreed that we should report cases to the FPA but I think I’m trying to put in perspective employment discipline, regulatory discipline, and financial professional association discipline. | I’ve reached the point that I have agreed that we should report cases to the FPA but I think I’m trying to put in perspective employment discipline, regulatory discipline, and financial professional association discipline. |
| And we’re off. Senior counsel assisting, Rowena Orr, is questioning NAB senior executive Andrew Hagger about the bank’s dealings with beneficiary nomination forms for superannuation funds. | And we’re off. Senior counsel assisting, Rowena Orr, is questioning NAB senior executive Andrew Hagger about the bank’s dealings with beneficiary nomination forms for superannuation funds. |
| One Nation senator Pauline Hanson spoke to the ABC a little earlier. You will remember that Hanson originally supported the idea of a royal commission but says she was talked out of it by the Turnbull government. | One Nation senator Pauline Hanson spoke to the ABC a little earlier. You will remember that Hanson originally supported the idea of a royal commission but says she was talked out of it by the Turnbull government. |
| Hanson says she wants to see the banks pay for the royal commission, not taxpayers. | Hanson says she wants to see the banks pay for the royal commission, not taxpayers. |
| Hanson also wants the inquiry to be extended to liquidators and mortgage insurance. | Hanson also wants the inquiry to be extended to liquidators and mortgage insurance. |
| It’s wrong, what happened. Until we get tough on crime, it will never stop. I believe this is the way of showing we are tough on it, you will pay for your that crime that you have done. And it’s not up to the taxpayer to fund this. | It’s wrong, what happened. Until we get tough on crime, it will never stop. I believe this is the way of showing we are tough on it, you will pay for your that crime that you have done. And it’s not up to the taxpayer to fund this. |
| The royal commission is scheduled to begin at 9.45am. | The royal commission is scheduled to begin at 9.45am. |
| Until then, let’s recap political developments overnight and this morning. | Until then, let’s recap political developments overnight and this morning. |
| On Q&A last night, the former Turnbull government minister Fiona Nash admitted the Coalition got it wrong in not calling a banking royal commission sooner. | On Q&A last night, the former Turnbull government minister Fiona Nash admitted the Coalition got it wrong in not calling a banking royal commission sooner. |
| “I was in government at the time, I think we got it wrong,” Nash said. “I think we should have done it sooner. | “I was in government at the time, I think we got it wrong,” Nash said. “I think we should have done it sooner. |
| “Australian people intrinsically want to see things be fair and I really do think we should have done that sooner than we did when I was in government.” | “Australian people intrinsically want to see things be fair and I really do think we should have done that sooner than we did when I was in government.” |
| Her admission follows former deputy prime minister Barnaby Joyce’s, as well as that of cabinet minister Matt Canavan, who too admitted he was wrong. | Her admission follows former deputy prime minister Barnaby Joyce’s, as well as that of cabinet minister Matt Canavan, who too admitted he was wrong. |
| The finance minister, Mathias Cormann, offered a more qualified concession. He said the government had genuinely believed there were enough inquiries into the banking sector, and that it was time for action. But he told Sky News that “with the benefit of hindsight” the inquiry should have been called earlier. | The finance minister, Mathias Cormann, offered a more qualified concession. He said the government had genuinely believed there were enough inquiries into the banking sector, and that it was time for action. But he told Sky News that “with the benefit of hindsight” the inquiry should have been called earlier. |
| He said he had been surprised by the revelations but cautioned against rushing to judgment against the entire sector. | He said he had been surprised by the revelations but cautioned against rushing to judgment against the entire sector. |
| “You can’t make a blanket statement across the board,” Corman said. “Obviously the royal commission is working through what’s what and who’s done what, and to the extent there is wrongdoing, people have to have the book thrown at them.” | “You can’t make a blanket statement across the board,” Corman said. “Obviously the royal commission is working through what’s what and who’s done what, and to the extent there is wrongdoing, people have to have the book thrown at them.” |
| Hello, and welcome to another day at the financial services royal commission. It’s the National Australia Bank under the spotlight again today. We’re expecting senior NAB executive Andrew Hagger will continue his evidence, after admitting on Monday that NAB financial advisers engaged in improper or dishonest conduct. | Hello, and welcome to another day at the financial services royal commission. It’s the National Australia Bank under the spotlight again today. We’re expecting senior NAB executive Andrew Hagger will continue his evidence, after admitting on Monday that NAB financial advisers engaged in improper or dishonest conduct. |
| The inquiry is currently looking at how NAB advisers incorrectly witnessed binding beneficiary nomination forms for superannuation funds. Their actions may have affected the validity of the forms for about 2,500 customers. Customer signatures were forged, customers were impersonated and unauthorised withdrawals were made from their accounts. | The inquiry is currently looking at how NAB advisers incorrectly witnessed binding beneficiary nomination forms for superannuation funds. Their actions may have affected the validity of the forms for about 2,500 customers. Customer signatures were forged, customers were impersonated and unauthorised withdrawals were made from their accounts. |
| We’ll bring you live updates as Hagger’s evidence continues. | We’ll bring you live updates as Hagger’s evidence continues. |
| If this inquiry stays true to form, it’s sure to be another explosive day. | If this inquiry stays true to form, it’s sure to be another explosive day. |