Banks in denial about cash scam

by | Mar 3, 2017 | Despatch, Finance, Government

The inquiry into the banks, the Clayton’s Royal Commission if you like, kicked off today with NAB boss Andrew Thorburn giving evidence.

The committee would do well to ask Thorburn about the bank scam of “upstreaming” cash from superannuation customers and investors from the NAB controlled funds directly to the bank.

As revealed here last month, Plum customers don’t have their cash shopped around for the best return; it just goes to NAB as a source of cheap funding.

 

Cash lurk: banks skim millions from customers, again

We finally got a response from National Australia Bank on a two-week old media inquiry this morning. Westpac has responded and CBA and ANZ remain in hiding.

The banks have been dudding their superannuation and investor customers for years by failing to diversify their cash.

Rather than shopping around these billions in cash to diversify and seek the best return, they simply “upstream” the cash from their investment platforms to the bank.

The industry funds sector does it too by slotting its cash straight to ME Bank.

This is the response from NAB:

“Over the past few years, we have undertaken a number of thorough reviews of our cash option, including an independent review, to ensure that across a range of measures the investment option is appropriate for our investors.

“We are confident we have the right structure in place for our clients.”

No word of who conducted this “independent review”. Westpac, for its part, responded last week that the “default” cash from its BT investment arm went to Westpac but that its dedicated cash management funds did shop about to diversify and achieve the best return.

We can only surmise that ANZ and Commonwealth Bank upstream all their cash from ANZ funds management and CBA’s funds (Colonial and CFS). They are yet to confirm this.

ABOUT THE AUTHOR

Michael West

Michael West

Michael West established michaelwest.com.au to focus on journalism of high public interest, particularly the rising power of corporations over democracy. Formerly a journalist and editor at Fairfax newspapers and a columnist at News Corp, West was appointed Adjunct Associate Professor at the University of Sydney’s School of Social and Political Sciences. You can follow Michael on Twitter @MichaelWestBiz.

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