- An Open Letter to Andrew Thorburn (NAB)
- By Julia Angrisano
- Contributed by: Sime ( 14 articles in 2018 )
Explosive Evidence at the Banking Royal Commission
Toxic Executive Culture Continues
Last week the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry heard explosive evidence about bank executives charging customers fees for no service, misleading the regulator, and then thinking up creative ways to avoid paying the money back. When all that failed they tried stalling repayments. As a result the Commission required NAB Executive, Consumer and Wealth, Andrew Hagger, to attend the Royal Commission again yesterday to provide an explanation for the bank’s behaviour.
Is Your Super Safe?
Late last week the FSU wrote to NAB seeking clarification about whether the fee for no service scandal extended to employee superannuation accounts.
The FSU will be writing to each of the big four banks to clarify whether they have been charging fees for no service on employee superannuation accounts.
We will take all necessary steps to ensure FSU members have not been adversely affected.
Workers are Not the Problem
Bank Executives have tried hard to make the Royal Commission all about individual workers behaving badly. We know it's really about toxic cultural and systemic issues caused by poor leadership.
Conflicted remuneration structures are central to the community’s loss of trust and confidence in our industry. Despite the ABA Review into product payments and commissions and their relationship to poor customer outcomes, almost 18 months on, nothing has really changed.
Conflicted Remuneration – The Real Problem
Workers are still reporting daily and relentless pressure to sell products regardless of the best interest of the customer.
This conflicted position is bad for customers and bad for communities.
It only serves bank executives, who make millions of dollars each year in pay and bonuses as a reward for perpetuating this sales culture.
NAB executive Andrew Hagger, who oversaw the fee for no service scandal that was exposed in the Royal Commission last week, also oversaw the Beneficiary Nomination form issue. In 2017, while overseeing these epic systemic and cultural failings, his total remuneration realised was over $2.8 million. He was graded as having “achieved” and as demonstrating NAB’s values and behaviours. The double standard is stark.
The Commission heard evidence that, in the last four years, NAB had not provided breach notices to ASIC within 10 days as required by the Corporations Act on 84 occasions. 83 of these failures had been breaches arising from the Wealth division that Mr Hagger is in charge of. If a front-line worker had failed to act within a time limit imposed by the Corporations Act on 83 occasions, they would not be rated as “highly achieved”, and would not receive millions in bonuses.
FSU Calls for an Independent Review of Culture across Banking
It’s blatantly obvious that self-regulation is failing workers, customers and our community. While banks remain addicted to conflicted pay models, culture will not change.
The FSU has issued an open letter to Andrew Thorburn calling for an independent review of NAB culture. The issues identified at NAB are industry-wide. All banks have embraced pay models that incentivise the pursuit of short-term incentives and profits over good customer outcomes. NAB must first acknowledge the cultural problem created by conflicted pay models, and work with the Union on industry solutions that benefit workers and rebuild community trust and confidence.
You can read the open letter to Andrew Thorburn here: http://bit.ly/OpenLetter18