NAB faces class action over super conflicts

A class action alleges NAB had revenue conflicts and ­breached trustee covenants, causing “substantial” losses to super customers.

A class action against National Australia Bank alleges that NAB had revenue conflicts and ­breached trustee covenants, causing “substantial” losses to more than 330,000 superannuation customers.

Plaintiff law firm Maurice Blackburn lodged the Victorian Supreme Court action against MLC Nominees and NULIS Nominees late on Wednesday.

While the customer losses were not quantified, Maurice Blackburn national head of class actions Andrew Watson said the case would centre on NAB’s failure to shift more than $6.3bn of member balances to the lower-cost MySuper product “in a timely way and in the best interests of superannuation fund members”.

“The contraventions at the heart of this case resulted in NAB’s default MasterKey super members paying higher fees and commissions and receiving lower investment returns for a period of time, when they could have been in a cheaper, better overall ­MySuper product,” Mr Watson said.

“This is another regrettable case of mismanagement in the superannuation sector.”

A NAB spokesman said: “NULIS and MLC Nominees will carefully consider any allegations when we receive the claim.”

NAB was targeted in the financial services royal commission for multiple breaches of super legislation, with commissioner Kenneth Hayne referring its conduct to the prudential regulator for consideration of possible criminal or civil proceedings.

Mr Hayne said NAB had acknowledged that one of the consequences of its delay was that members paid higher fees for longer, and that advisers “stood to benefit from this to the financial detriment of those members”.

The claim lodged by Maurice Blackburn says there were conflicts arising from fees that disadvantaged members but swelled NAB group revenue, and lifted conflicted remuneration for financial advisers from grandfathered trailing commissions.

It says MLC and NULIS failed to exercise the care, skill and diligence required of a prudent super trustee, or perform their duties and exercise their powers in the best interest of beneficiaries.

They also failed to give priority to the interests of members where a conflict of interest arose, and breached their general law obligations, according to the claim.

Mr Watson said the whole point of the MySuper reforms was to make sure that millions of Australians who hadn’t made an active decision about their super were not losing money on higher fees and unnecessary or unused services.

“MySuper was introduced to protect the retirement outcomes of Australians,” he said.

“MLC Nominees and NULIS’s job was to move default member balances into MySuper at the time that best met their members’ needs, not the needs of NAB or financial advisers.”

with Gerard Cockburn