Some National Australia Bank financial planners have impersonated customers, forged their signatures and withdrawn money from their accounts.
The bank has admitted the misconduct to the banking royal commission, which is examining the incorrect witnessing of beneficiary nomination forms that could potentially affect the final wishes of 2,500 NAB customers.
Improper or dishonest conduct by NAB financial advisers has included impersonating customers, forging their signatures and making unauthorised withdrawals from clients' accounts, senior bank executive Andrew Hagger said.
The commission heard a NAB financial adviser forged a couple's initials and asked another employee to falsely witness a form where the husband and wife nominated each other as the binding beneficiary of life insurance through their superannuation.
NAB then discovered a much wider problem with 350 employees involved in incorrect witnessing of binding beneficiary forms for superannuation funds, potentially affecting their validity for about 2,500 customers.
Mr Hagger, the chief customer officer for the five million customers in NAB's consumer banking and wealth management division, said the failure to comply with the witnessing requirements potentially impacted clients' estate planning wishes.
"It creates the potential for the beneficiary nomination form to be invalid and for the trustee to then make a determination in the event of death," he told the commission on Monday.
"In doing so there is then the possibility that the trustee would allocate the funds differently to the initial wishes expressed by the client."
NAB's Andrew Hagger (left). Source: AAP
The commission earlier heard about cases of inappropriate advice given by ANZ and AMP financial planners.
ANZ executive Kylie Rixon admitted that before changes to financial advice laws in 2013, ANZ Financial Planning had a culture that emphasised the growth of the business more than clients' best interests.
The chief risk officer for ANZ's Australian wealth business also said the bank's systems and processes had been deficient.
A 2015 audit showed one in every 20 pieces of advice given by ANZ planners failed to meet the requirement that it was likely to be in the best interests of clients and that the bank knew it had "high risk" advisers.
Ms Rixon said the results were regrettable.
Documents also showed in 2014 ANZ estimated it could take a $20 million hit due to inappropriate advice but accepted the risk and deemed the financial loss - half due to client complaint losses and half for remediation - and any impact on its reputation as "moderate".
The commission also heard Australia's largest wealth manager AMP has yet to tell a number of customers that they have been victims of inappropriate financial advice.
AMP's head of advice compliance Sarah Britt said it had historically underestimated the task it faced with its review and remediation program.
"I think as an organisation we have to own that and there has been a huge effort to restructure and reset the program going forward so that it is adequately resourced," she said.
In a statement the company apologised to customers who received inappropriate advice from advisers employed or aligned to AMP and for delays in identifying their conduct and remediating affected customers.
