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14-093MR NAB Wealth to refund customers after review of system error
NAB Wealth has identified a system error that resulted in some customers having incorrect investment income allocated to their account. ASIC has been working with NAB Wealth to resolve this matter in the interests of investors.
The errors occurred between, approximately, 2006 and 2012 on NAB Wealth's Navigator platform. In 2012, compensation to the value of $1.9 million was paid to approximately 43,000 customers.
NAB Wealth has subsequently completed a review of this matter and identified the need to pay a smaller amount of additional compensation to impacted customers.
At ASIC's request, NAB Wealth has also appointed Pricewaterhouse Coopers, who will review:
The adequacy of compensation already paid and the process adopted to identify customers potentially impacted.
NAB Wealth's relevant operating system and its capability for correctly allocating income to customers as well as their commitment to strengthening these controls.
NAB Wealth's breach identification, reporting and management processes.
Commissioner Greg Tanzer said, 'It is important for entities to ensure that, where errors do occur, that they are identified as early as possible and appropriately rectified.
'ASIC will work with entities who report issues to us to ensure consumers are compensated in a timely, effective way'.
ASIC acknowledges the cooperative approach taken by NAB Wealth in this matter.
There is no need to lodge a claim as affected customers will – or have been – identified and offered compensation.
NAB Wealth's Navigator platform operates investor directed portfolio services and superannuation funds that link a number of investments held by customers and provide consolidated custody, administration and reporting to customers.
The affected superannuation funds are:
MLC Superannuation Fund
DPM Retirement Service, and
Premium Choice Retirement Service.
The errors also affected customers in the following investor directed portfolio services:
MLC Navigator Investment Plan
DPM Investment Service, and
PremiumChoice Investment Service.
Customers are entitled to receive any income that is received by the superannuation fund or investor directed portfolio service (e.g. dividends and trust distributions) in respect of their period of ownership. Whenever a customer acquires a new investment or disposes of an investment through the superannuation fund or investor directed portfolio service, at or around the time the issuer of the investment is about to make an income payment on the investment, various rules cover the allocation of the income and whether it should be allocated to the new owner or the old owner of the investment.
In this instance, the processes in place to allocate the accrual of income did not function correctly or adequately and some customers of the superannuation funds and investor directed portfolio services received a lower income allocation than the amount to which they were entitled.