Fairfax journalists Adele Ferguson and Ruth Williams have exposed yet another financial planning scandal, this time involving the National Australia Bank (NAB). Just as the Commonwealth Bank was beginning to slip out of public scrutiny for its own financial advice disaster, evidence has emerged of more sackings, cover-ups and inappropriate advice at NAB.
The revelations that NAB’s financial advice arm is fraught with compliance breaches, forgery and fraud has brought to light the need to revise policy around bank conflicts of interest. Australians expect to be given fair and unbiased advice from experts, not to be sold products from financial advisers that are aligned with the businesses building those financial products.
But the reality is quite the opposite. The big four banks (CBA, NAB, Westpac, ANZ) and AMP are ‘vertically integrated’, allowing them to both manufacture financial products and recommend them through their financial advice networks. This has led to a situation where bank-aligned advisers exhibit a strong preference for their own products and platforms over competing offerings, seemingly without regard to whether they’re really the best options for their clients.
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