NAB pays out $6.5m to victims of poor advice

National Australia Bank has shelled out $6.5 million in compensation to victims of poor ­financial advice.

National Australia Bank has paid $6.5 million in compensation to victims of poor ­financial advice over the past 18 months as part of its wealth ­advice response program.

Commenting on the figures, released yesterday, NAB’s head of consumer banking and wealth management, Andrew Hagger, said the bank was ­committed to restoring trust and confidence in the financial ­planning industry.

The sector has been bruised by revelations of poor advice, misaligned financial incentives and fraudulent behaviour.

A wealth management investigation being carried out by the Australian Securities & Investments Commission, established in 2014, has permanently banned more than a dozen advisers from the sector, weighted towards professionals from NAB and Commonwealth Bank.

CBA said it had completed, as of June, almost a third of its open advice review program for victims of poor financial advice, with $7.8m in compensation ­offers made to 571 customers.

This compares with NAB’s compensation of $6.5m, which has been made to 251 customers since the company began contacting customers who had raised concerns since 2009.

“Our focus is to do the right thing by our customers,” Mr Hagger said. “We’re committed to helping restore customer trust and confidence in the financial planning industry.”

NAB said it had made a “significant” investment in the bank’s capacity to investigate and resolve customer complaints.

ASIC has reportedly tallied the $200m-plus of compensation paid by the big banks over the past year as part of a review into Australian financial services licensees, which offer personal advice to customers.

The update comes as the banks prepare to front next week’s parliamentary banking inquiry, set up after the big four banks failed to pass on the latest Reserve Bank rate cut in full.

CBA appears on Tuesday, ANZ on Wednesday and NAB and Westpac on Thursday.