To clean up the financial system we need to watch the watchers

by Dr. Andy Schmulow

Scandals involving Australia’s financial advice sector and the regulation of it have continued
into another month, the latest chapter of which has involved NAB’s financial advice division. But this is not the first time NAB has attracted attention for its behaviour and the oversight of it.

There was the time when the Australian Investments and Securities Commission (ASIC) allowed NAB to review and massage ASIC’s own media statement about NAB malfeasance. And the controversy when it was discovered senior lawyers from NAB had been allowed into ASIC, to work, observe, and no doubt given the chance, to advise, caution and warn. Followed by ASIC stating, on the record, that no NAB lawyers were allowed to infiltrate and contaminate its policy development branch. Only to be made fools of by their own evidence, that in fact NAB lawyers were present and working in the policy formulation space at ASIC.

Only when the problems at NAB were revealed was the public informed NAB had sacked 37 senior advisers for “failing to meet standards”.