NAB boss Andrew Thorburn in the loop on super fee talks

The NAB’s boss was told of efforts to downplay the collection of super fees but it was seen as merely a disclosure problem.

Nicole Smith, who was until June the chairman of NAB’s superannuation trustee company, NULIS, at the banking royal commission in Melbourne. Picture: Stuart McEvoy.

NAB boss Andrew Thorburn was kept informed of efforts by ­employees to downplay the collection of fees from superannuation customers — to which the bank was not entitled — but it was seen as merely a disclosure problem, documents at the financial services royal commission have revealed.

The commission also heard yesterday of the lengths bank executives went to in an effort to keep charging the “plan service fee”, including ­describing access to its website as a valuable service.

Documents tendered to the commission show NAB’s corporate affairs division sent Mr Thorburn a briefing on discussions with the Australian Securities & Investments Commission over the issue on October 22, 2016. “Can we please discuss Monday, when we meet,” Mr Thorburn responded.

NAB has since paid $35 million in compensation to more than 220,000 super fund members hit by a “plan service fee” between 2012 and 2016. The fee was supposed to cover the cost of advice by a financial planner but was charged to members even though they did not have an ­adviser.

Mr Thorburn was told in the briefing that the problem was that members had not been told they were able to “turn down or turn off the PSF altogether”. However, a senior executive in the bank’s superannuation division yesterday told the commission that, in her view, the bank was simply not allowed to charge the fee to members who did not have an adviser.

In internal documents, NAB executives suggested it could be allowed to charge the fee for services provided to all members by its subsidiary MLC, including “promotional material”, communications ­inclu­ding financial “tools and calculators”, “relationship managers and education consultants” and “website and online facilities”.

However, in her evidence to the commission yesterday, Nicole Smith, who until June was chairwoman of NAB’s superannuation trustee company, NULIS, said the fee could not be charged for services provided by MLC, but only for those provided by an ­adviser.

Counsel assisting the commission, ­Michael Hodge QC, asked: “You didn’t think if somebody else provides some other service then the fee will still be charged?”

“Who else sets an adviser service fee?” Ms Smith responded.

Earlier, NAB’s attempts to blame junior staff for trying to find ways to keep charging the fee collapsed during cross-examination of the bank’s former superannuation boss, Paul Carter.

Counsel for the bank, Neil Young QC, said the ideas were raised by people “at a low level”. But the commission heard management of NAB’s super division considered whether there were services that could be used to justify continuing to charge the fee as they prepared for a meeting with chief customer officer Andrew Haggar in September 2016.

The fee issue, which affected members of NAB’s MasterKey corporate funds, raged within NAB as it worked to clean up its super trustee structure in mid to late 2016. Mr Carter initially adopted Mr Young’s statement.

Mr Hodge showed the commission an email Mr Carter wrote on September 19, 2016, in preparation for a meeting with Mr Haggar. “Current thinking of eligible services are additional general advice services such as on-site visits” and invitations to “member town halls and education seminars”, Mr Carter wrote.

The commission was shown a briefing paper written by Mr ­Carter as the bank was considering what to do about the fee earlier in 2016. Mr Carter said he did not recall writing the paper. “I don’t recall the specifics of this paper but it’s got my name on it,” he said.

He agreed with Mr Hodge that it was “not simply lower level employees”. “Certainly I had to consider these questions as well,” Mr Carter said.