October 16, 2018
NAB has become the third bank, in as many weeks, to release figures outlining the expected costs of remediation related to its financial advice business, and will set aside $314 million for the task.
The bank released the figure via a statement to the ASX which noted the remediation costs were for “…refunds and compensation to customers impacted by issues in NAB’s Wealth business, including adviser service fees, plan service fees, the Wealth advice review and other Wealth related issues”.
The figure released also included costs for implementing the remediation processes but did not included any costs associated with responding to the Financial Services Royal Commission.
NAB stated that “…approximately 69 per cent of these costs will impact revenue, with the balance reported in expenses” and there was potential for further costs as the remediation programs continued in 2019.
NAB Chief Executive Officer, Andrew Thorburn said, “Where we have let customers down we are determined to put things right. We have made good progress in resolving a number of issues that impacted our customers and we want to compensate them as quickly as possible.”
Recently, ANZ announced it would set aside $374 million for remediation costs related to financial advice (see: ANZ Earmarks $374 Million for Advice Remediation) and Westpac announced it would set aside $235 million for the same work (see: Westpac Flags $235 Million For Advice Remediation).
Earlier this year, ASIC indicated remediation costs related to ‘fee for no service’ advice could run as high as $850 million (see: Fee For No Service Remediation Could Pass $850 Million).