The National Australia Bank Ltd (ASX: NAB) share price is trading lower on Wednesday following news of another class action.
At the time of writing the banking giant’s shares are down 0.5% to $25.61.
What is the class action?
This morning Maurice Blackburn announced that it has filed a class action against two of NAB’s subsidiaries; MLC Nominees and NULIS Nominees.
According to the release, the class action alleges that MLC Nominees and NULIS Nominees breached their duties in the management of superannuation assets and failed to act in the beneficiaries’ best interests.
This includes failing to exercise the degree of care, skill and diligence required of a prudent superannuation trustee.
It also claims that they failed to perform their duties and exercise their power in the best interest of beneficiaries and give priority to the interests of beneficiaries where a conflict of interest arose.
The class action alleges that MLC Nominees and NULIS Nominees left clients idling in products with higher fees and commissions that are outlawed in the low cost default MySuper product. As a result, they received a lower investment return for an extended period of time.
Maurice Blackburn’s National Head of Class Actions, Andrew Watson, said: “The contraventions at the heart of this case resulted in NAB’s default MasterKey super members paying higher fees and commissions and receiving lower investment returns for periods of time, when they could have been in a cheaper, better overall MySuper product.”
“This is another regrettable case of mismanagement in the superannuation sector. The whole point of the MySuper reforms was to make sure that millions of everyday Australians who hadn’t made an active decision about their super were not losing money on higher fees and unnecessary or unused services,” he added.
“Taken as a whole, the evidence shows that NAB and NULIS (and before NULIS, MLC Nominees) did not move with all deliberate speed to effect the transfers. I consider that they did not do that for fear of how advisers would react to the loss of commissions that would follow from the transfer,” Watson concluded.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of National Australia Bank Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.