Law firm Maurice Blackburn will on Wednesday launch a class action lawsuit against National Australia Bank for delaying the move of $6.3bn belonging to more than 330,000 super customers to low-fee accounts – a decision that allowed the big four bank’s financial advisers to continue to reap lucrative fees.
The lawsuit, to be filed in the Victorian supreme court, will accuse two NAB subsidiaries that acted as superannuation trustees, Nulis Nominees (Australia) and MLC Nominees, of failing in their duty to put fund members first when there was a conflict of interest.
In his final report last February, the banking royal commissioner Kenneth Hayne found that the two companies “prioritised the commercial interests of the NAB group or the interests of advisers, or more probably, both” by dragging out the transfers.
The new class action is the latest Hayne pain felt by the bank, which lost its chief executive, Andrew Thorburn, and chairman, the former treasury secretary Ken Henry, after the commissioner excoriated them in his report.
NAB suffers dramatic 10.6% profit fall in wake of banking royal commission
Profit has slumped more than 10% because of the scandal and the bank has set aside more than $2bn to compensate customers it has ripped off.
It has already settled one class action related to the royal commission, paying almost $50m in November to people who took out worthless credit card insurance. It also faces a series of lawsuits from the corporate regulator for charging fees without providing a service that includes one lodged just before Christmas that carries a theoretical maximum penalty running into the billions of dollars.
Maurice Blackburn’s class action covers customers who had super accounts with the MasterKey Business Super and Personal Super funds.
Customers with money in the two funds originally paid a commission to financial advisers who organised the funds, but in 2012 this was replaced with a “plan service fee” of about the same size.
About $33.8m was deducted from the accounts of 220,000 members who had no adviser to give them any service, and an additional $67m was taken from members who did have an adviser, Hayne found.
Under reforms brought in by the Gillard government, NAB was required to move dormant accounts, called “accrued default amounts” or ADAs, to new low-cost MySuper accounts by a deadline of 1 July 2017.
But, Hayne said, this was “the outer limit for compliance and does not take account of trustees’ other obligations” towards members.
Other funds moved their customers earlier, he found.
In evidence to the commission, NAB “acknowledged that one of the consequences of the delay was that members paid higher fees for longer than they would have had their ADAs been transferred earlier”, Hayne said.
“Advisers, including advisers within the NAB group, stood to benefit from this to the financial detriment of those members.”
Maurice Blackburn’s head of class actions, Andrew Watson, said the saga was “another regrettable case of mismanagement in the superannuation sector”.
“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.”
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