NAB stops taking grandfathered commissions on super

The National Australia Bank announces it will stop taking grandfathered commissions.

Grandfathered commissions stopped

The National Australia Bank (NAB) announced on Monday that it would stop taking grandfathered commissions from its wealth product providers and has urged the rest of the financial services industry to follow suit.

In the wake of revelations at the financial services royal commission, the Australian Securities and Investments Commission (ASIC) called for an end to grandfathered commissions, saying that they encouraged advisers to keep clients in legacy products instead of moving them onto better products.

Freedom of Financial Advice (FOFA) legislation introduced five years ago banned conflicted remuneration for financial products. ‘Grandfathering’ refers to the old laws that applied before this time that continue on contracts that were entered into before the new laws came into effect.

According to a statement from the NAB, around 32,000 superannuation and investment customers will benefit through approximately $11 million in fee rebates and reductions, which will take effect from 1 January 2019.

NAB Financial Planning and NAB Direct Advice will also work with external product providers to have grandfathered commissions that are currently being paid utilised for the benefit of members.

“We need to continue to focus on customers and keep finding ways to improve, to lift and to rebuild trust,” NAB Group CEO Andrew Thorburn said.

“To do this, we must continue our important work to transform the bank to be simpler, faster – and better.”

Mr Thorburn said that the NAB supported a complete move away from grandfathered commissions right across the industry.

Westpac made the move in June to remove grandfathered payments attributable to its BT advice products.

Should the rest of the financial services sector follow Westpac and NAB’s lead and stop accepting grandfathered commissions?

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    COMMENTS

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    5th Sep 2018
    1:13pm
    Well done NAB. Hope this leads to improved profits next year
    Anonymous
    5th Sep 2018
    5:01pm
    I hope they go bankrupt. The greedy criminal bastards deserve to.
    Priscilla
    5th Sep 2018
    1:25pm
    What would really be nice is if the NAB gave us a decent interest rate on our savings e.g. the government deeming rate or a rate thate compares with their reverse mortgage rate. There I go dreaming again!
    Anonymous
    5th Sep 2018
    5:03pm
    Hi Priscilla. Savings rates are low because the Central Bank has kept the cash rate at historic lows
    Banks are powerless to offer higher savings rates as a result

    5th Sep 2018
    5:02pm
    The banks stink to high heaven, and nothing they do will ever change that.
    Anonymous
    5th Sep 2018
    5:04pm
    Try showering at least once a day Know-a-lot
    Nan Norma
    5th Sep 2018
    7:10pm
    The NAB give the wrong advice and caused someone a debt of thousands of dollars.
    MD
    5th Sep 2018
    7:39pm
    So how does that affect you Nan Norma, never given any (or taken) any "wrong advice" ?

    Under no circumstances whatsoever do I condone the reprehensible actions of our banks, although I do wonder how much of what occurred simply mirrored some peoples's expectations. It's worth remembering, discovery of a 'golden egg' suggests there's more than a solitary goose loose.
    Nan Norma
    6th Sep 2018
    10:24am
    I'm not a bank. If a bank gives a customer approval to go ahead with a business deal then changes its mind after, to late for the customer to withdraw, that is negligence. that's what NAB did. Thousands of dollars were lost, not counting years of stress.
    ray from Bondi
    5th Sep 2018
    9:08pm
    and just what will they do instead to gouge their customers you can already see the banks increasing there interest rates demanded for loans to cover all the fines coming their way, you do not seriously think that they will come from the shareholders profits do you.
    80 plus
    6th Sep 2018
    8:47am
    I have a M.L.C Super, I welcome this announcement.