Financial Services Guide

effective 27August 2007

Contents

About this Document
Financial services and products we are authorised to provide
Who does nab act for when providing the financial services?
What relationships do we have with product issuers?
Arrangements with external service providers
How can a nab staff member assist you?
Instructing us 
Payment for the services we provide
Remuneration or other benefits received by nab staff members
Referral fees
Lodging a complaint
Contacting Us 


About this Document

This Financial Services Guide (‘FSG’) is an important document that is provided by National Australia Bank Limited ABN 12 004 044 937 (‘NAB’, ‘we’, ‘us’ or ‘our’). Our contact details are set out on the last page of this FSG. This FSG sets out the range of financial services and the types of financial products that we (including HomeSide Lending and Bank of New Zealand Australia which are divisions of National Australia Bank) are authorised to provide under our Australian Financial Services Licence 230686 (AFSL). Except as stated below, it relates to the financial services we provide to retail customers and contains information to help you decide whether to use these financial services.

It includes information about:

• how we and our associates are remunerated in relation to the services offered;
• any relationships or associations we may have with product issuers; and 
• our internal and external complaints handling procedures and how these are available to you.

This FSG does not relate to financial services provided by our financial planning businesses and National Insurance Services which have their own FSG. It also does not relate to any services or products we provide that are not financial services or financial products (for example loan products).

We will generally provide you with a Product Disclosure Statement (PDS) or other disclosure document in relation to a financial product if we give you personal financial product advice about the product or if we offer or arrange to issue a financial product to you. Personal financial product advice includes advice that takes into account one or more of your objectives, financial situation and needs. In certain circumstances we are not required to provide a PDS (including, for example, where you already have one). The PDS contains information about the financial product and will assist you in making an informed decision about the product.

If you are provided with personal financial product advice we may also issue you with a Statement of Advice (SoA). The SoA will contain: 

• the advice; 
• the basis on which it is given; 
• information relating to fees, commissions and other benefits and any relationships, associations or interests that may influence the advice you receive.

We are not required to issue you with a SoA where the personal financial product advice relates to certain deposit and non-cash payment products and travellers cheques provided we disclose certain information about remuneration and other benefits or interests which may influence the advice.

Financial services and products we are authorised to provide

NAB is authorised under its AFSL to provide the following financial services:

•  financial product advice (both general and personal); and 
•  dealing in financial products on behalf of others. 

•  deposit and non-cash payment products; 
•  derivatives;
•  foreign exchange contracts; 
•  general insurance;
•  government debentures, stocks or bonds;
•  life products (investment life and life risk); 
•  managed investment schemes including investor directed portfolio services (IDPS); 
•  retirement savings accounts;
•  securities; and 
•  superannuation.

NAB is authorised to issue financial products in the above range (excluding government debentures, stocks or bonds, general insurance, life products and superannuation) and to underwrite interests in managed investment schemes and issues of securities.

NAB is a non-broker participant in the Australian Stock Exchange Limited, and is also authorised to make a market in foreign exchange contracts, derivatives, debentures, government bonds or stocks and other financial products.

It may also operate custodial or depository services (not IDPS).

Who does NAB act for when providing financial services?

NAB is responsible for the financial services it provides to you under its AFSL.

NAB may act as a distributor or agent on behalf of other product issuers, including issuers of travellers’ cheques, securities, managed investment schemes and superannuation products, and general insurance companies and life insurance companies through distribution or agency arrangements. See below for further details of those relationships.

What relationships do we have with product issuers?

Many of the products offered by NAB are issued by us and companies related to us.

Related companies in the National Group that are product issuers (in addition to NAB) include: 

• National Australia Financial Management Limited (NAFM);
• National Australia Trustees Limited;
• National Asset Management Limited;
• MLC Limited;
• MLC Investments Limited;
• MLC Nominees Pty Limited;
• MLC Lifetime Company Limited; and
• PFS Nominees Pty Limited.

NAB acts on behalf of other product issuers when it sells the following products:

•  life and general insurance 
•  investment and superannuation products 
•  travellers’ cheques

If you need to know the name of the issuer of a product that NAB offers you, and therefore who NAB acts for when it offers you that product, please refer to the Product Disclosure Statement, Statement of Advice or any other disclosure document you receive or ask your adviser.

Any additional relationships which we have for the purposes of our financial planning business or our National Insurance Service will be disclosed in the FSG for these parts of our business.

Arrangements with external service providers

NAB may from time to time engage a third party to provide financial services on its behalf. Where a third party does not hold its own AFSL, it will provide the financial services as NAB’s ‘authorised representative’.

NAB may authorise a company or an individual to act as our authorised representative for sales and marketing activities.

How can a NAB staff member assist you?

To the extent that we authorise a NAB staff member to do so, the staff member can help you to apply for the financial products referred to in this FSG and can also give you financial product advice in relation to them.

If a NAB staff member is unable to provide you with a financial service or a financial product that you are interested in, the staff member will refer you to another staff member who can.

As an integrated financial services provider, NAB also provides financial planning services and the National Insurance Service. If you require these services you will be referred to an appropriate person in NAB who will provide you with a separate FSG relating to the financial services that they may provide.

We will not give you personal financial product advice when you visit our website or contact us on 13 22 65.

Instructing us

You can give us instructions by using the contact details set out on the last page of this FSG.

Some products and services may have their own rules around how to provide instructions or execute certain transactions. Please refer to the PDS or other disclosure document for the product for these details.

Generally, you need to give us instructions in writing (e.g. fax, email or letter) or another method as agreed by us.

If we provide you with further advice, you may request a record of the advice, at that time or by contacting us on 13 22 65 up to 7 years after the day of providing the advice.

Payment for the services we provide

If you acquire a product issued by a company in the National Australia Bank Group of companies (including NAB), the relevant company, or any other National Australia Bank Group company providing services in relation to the product, may receive fees and or commissions in relation to that product which may ultimately benefit other members of the group and any directors or other associates of those companies. Any commissions or other fees that the relevant company, or any other National Australia Group company (including NAB) receives in relation to these services will generally be disclosed in the disclosure document for the relevant product.

In addition, NAB may receive any applicable bank or transaction charges. The fees you will pay for the products we offer are set out in the PDS or other disclosure document for the particular product.

Insurance Products

If you acquire a product issued by Allianz, CGU or Chubb, NAFM or NAB through an agency or distribution arrangement between NAFM or NAB and the issuer may earn commissions from the insurer in relation to these products as follows.

Allianz: Commissions are calculated and paid monthly and range from 10% to 25% (30% of Gross Written premium for Travel Insurance) of Base Premium (as defined below) for new insurance and insurance renewals. These percentages may be reduced where discounts apply. The actual percentage depends on the type of insurance product.

Chubb: Commissions are calculated and paid monthly and range from 10% for Gross Written Premium (as defined below) up to $5 million and 12.5% for Gross Written Premium over $5 million.

CGU: Commissions are calculated and paid monthly and range from 7.5% to 25% of Base Premium for new insurance and 5% to 20% for insurance renewals. The actual percentage depends on the type of insurance product.

If we refer you to Aon Risk Services Australia Limited (insurance broker), Aon may pay NAFM:

• 25% of any commission the product issuer agrees to pay to Aon from the Base Premium; and/or 
• 10% of any service or consulting fees that the customer agrees to pay to Aon (calculated and paid monthly).

‘Base Premium’ means the amount to be charged by the insurer to the customer for an insurance product before statutory charges and government levies.

‘Gross Written Premium’ means the total amount of premiums paid by customers to the insurer in respect of insurance arranged through the agency arrangement with NAFM or NAB in a 12-month period (net of statutory charges and government levies).

In certain circumstances NAFM may receive additional remuneration from the relevant insurer (25% from Chubb, 50% from Allianz & CGU) based on the profitability (or a proportion of it) of the portfolio for the insurer arranged through NAFM and its agents (including NAB), after allowing for claims and other expenses. This is calculated and paid annually.

In relation to CGU, a marketing allowance of up to 1.5% of Gross Written Premium is also paid by CGU to NAFM annually.

Allianz also pays the NAB’s marketing costs in relation to the travel insurance type of general insurance.

In relation to insurance products issued by MLC Limited, MLC Limited pays NAB an annual amount of up to 20% of the first year’s premium for policies sold by NAB during the relevant year.

Investment Products

For investment, superannuation or retirement products issued by any of MLC Investments Limited (MLCI), MLC Nominees Pty Ltd (MLCN) or MLC Limited (MLC) that are sold due to a referral or lead generated from the NAB, each of MLCI, MLCN and MLC will pay by instalments to the NAB an annual sum of up to the greater of 0.1% of current year inflows (via the NAB) or 0.05% of prior year inflows (via the NAB).  Inflows include, for example, contributions, top-ups, reinvestments etc.  MLCI, MLCN and MLC are all members of the National Australia Group of companies.

Travellers’ Cheques

If you acquire travellers’ cheques from us, we may earn a commission from the issuer of the travellers’ cheque as follows.

American Express Travel Related Services: Commissions are calculated and paid quarterly and range from 0.2% to 1% of the value of each travellers cheque sold during the quarter, depending on how long the agency agreement between NAB and American Express Travel Related Services has been operating and the total value of all travellers cheques sold by NAB that are denominated in US and Australian dollars and the Euro.

Travellers Cheque Associates: Commissions are calculated and paid quarterly and range from 0.4% to 0.5% of the value of each travellers cheque sold during the quarter, depending on how long the agency agreement between NAB and Travellers Cheque Associates has been operating and the total value of all travellers cheques sold by NAB that are denominated in British pounds.

If the total of all travellers cheques sold by NAB exceeds US$45 million in any one year, the issuers will provide NAB with a bonus sum of US$50,000.

In addition, NAB receives US$50,000 each year from the issuers of travellers’ cheques to use for marketing purposes.

Personal financial product advice

If personal financial product advice is given in relation to a financial product the amount of any commission that may be received or the manner in which it will be calculated will be disclosed in any SoA that is required to be issued to you.

Information in relation to the remuneration and any other benefits that must be disclosed in respect of our financial planning businesses and the National Insurance Service is set out in the FSG for these businesses.

Other unrelated entities

From time to time we may provide general advice and dealing or other services in relation to financial products that are offered by unrelated entities. Any commissions or other fees that we receive in relation to these services will generally be disclosed in the disclosure document for the relevant product.

Remuneration or other benefits received by NAB staff members

NAB staff members are salaried employees of NAB and in most cases do not receive any proportion of any fees or commissions paid to NAB or any other company in the National Group in connection with the financial services or financial products referred to in this FSG. NAB mobile bankers may receive incentive payments for sales of particular insurance products of up to $40 per policy.

Staff members may be entitled to receive additional monetary or non-monetary benefits and/or rewards resulting from participation in programs conducted by NAB. Monetary benefits or rewards may include an annual bonus, the level of which may depend on the overall performance of the National Group of companies. Non-monetary benefits or rewards for staff members and their partners may include gift vouchers, film tickets, restaurant meals, attendance at an annual conference or other functions.

Whether staff members receive any such benefits and rewards depends on a number of performance related factors including the level of remuneration generated for NAB from sales of products as a consequence of the staff member’s advice.

It is not possible to determine at any given time whether a staff member will receive such benefits or rewards or to quantify them. They are generally not directly attributable to any particular product that the staff member has given advice on.

Referral fees

If a customer is referred to us (whether by a person or a company within or outside the NAB Group), we may pay the referrer a fee. The fee varies according to the customer, referrer and the financial products involved. The fee involved will be set out in documents you may receive in these circumstances.

We pay these fees as upfront fees when the financial service is provided or the financial product is issued, or periodically as ongoing fees.

Lodging a complaint

You are entitled to enquire into or complain about the services you receive from us and our products. We have established procedures to ensure all enquiries and complaints are properly considered and dealt with. These procedures are more fully outlined in our brochure entitled Resolving Problems, which is available via NAB branches. Broadly, if you have an enquiry or complaint you wish to raise with NAB, you can do so in any of the following ways: 

• you are always welcome to speak directly to the staff at your branch and they will do their best to resolve your issues. If they are unable to do so, the matter will be escalated until resolved; or 
• call our dedicated complaints hotline any time between 8am and 7pm, Monday to Friday (EST), on freecall 1800 152 015; or
• complete the customer feedback form attached to our Resolving Problems brochure (referred to above). You can either fax it to us on (03) 8634 4888, or send it via post. The postage is paid and it is addressed to go direct to our Customer Resolutions Department:
  
  National Australia Bank
  Head of Customer Resolutions
  Reply Paid 2870
  Melbourne Victoria 8060

• you can also email our Customer Resolutions Department on nabfeedback@nab.com.au.or via the ‘Feedback’ page on the Bank’s website at nab.com.au

In our experience, many complaints are caused by confusion or misunderstanding which can be addressed very quickly. In these cases our staff will normally resolve the matter within 24 hours. If your complaint requires further investigation, we will write to you acknowledging receipt of your complaint, detailing:

• who will investigate your complaint and their contact details; 
• the timeframes in which you can expect resolution/a decision; 
• that if you are not satisfied with the outcome, you may refer your dispute to an External Dispute Resolution Scheme of which NAB is a member.

In most cases, we will resolve or respond to your dispute within 10 working days. If you ask us in writing to resolve the dispute or request a written response to a dispute, we will, within 21 days:

• complete our investigation and write to you with the outcome of our investigation; or 
• advise you of our need for more time to complete our investigation.

If we are still unable to resolve the complaint within 45 days, we will:

• inform you of the reasons for the delay; 
• provide you with monthly updates on the progress with the dispute; and 
• specify a date when a decision can reasonably be expected.

The only exception to the above will be if we are waiting for a response from you, which we have told you we require.

If you have raised an issue with NAB but don’t feel it has been resolved to your satisfaction, you may be able to raise your concerns with the Banking and Financial Services Ombudsman, if you are an individual or small business customer covered by the Banking and Financial Services Ombudsman Scheme.

The Ombudsman is not an advocate for either the customer or the bank, but works to assess the merits of each case based on the information provided by both parties, taking into account the law, applicable industry codes or guidelines, good banking practice and fairness.

You can phone the Banking and Financial Services Ombudsman on 1300 78 08 08. Alternatively, you can fax (03) 9613 7345 or write to:

The Banking and Financial Services Ombudsman
GPO Box 3
Melbourne Victoria 3001

Or visit the Banking and Financial Services Ombudsman website

Contacting Us

You can contact us by:

• calling us on 13 22 65; 
• visiting our website nab.com.au 
• writing to us at Level 24, 500 Bourke Street, Melbourne VIC 3000; or 
• Hearing impaired customers with telephone typewriters can contact us on 13 36 77 

Preparation of this FSG was completed on 31 July 2007