National Australia Bank has charged more than 4000 dead superannuation customers $3 million in advice fees.
NAB, the second major bank to admit charging dead customers, is being investigated by the corporate regulator for "suspected offending" involving wider fees-for-no-service conduct.
A document revealed in the banking royal commission details the Australian Securities and Investments Commission's concerns about how NAB has dealt with the issue of advisers charging fees without providing ongoing advice.
"ASIC is concerned by NAB and its group licensees' apparent failure to appreciate the extent and seriousness of this issue despite being on notice since at least 2010," the October 2017 document said.
The ASIC paper, prepared for a meeting with NAB, noted bank documents up to early 2015 revealed 40 complaints back to 2011 about ongoing service fees and poor service resulting in $155,000 paid to customers.
Data for NAB Financial Planning recorded complaints as early as 2009, including a client's son raising concerns a 1.1 per cent ongoing service fee was charged on the account for 15 years without ongoing service being provided.
The inquiry on Wednesday heard there were ongoing discussions between the bank and regulator about the conduct and remediation for customers.
NAB's superannuation trustee NULIS is already paying more than $100 million in compensation to super customers wrongly charged for general advice and is dropping that plan service fee.
Recently-departed NULIS chair Nicole Smith told the royal commission about other fees-for-no-service issues that involved adviser service fees paid to financial advisers.
Nicole Smith after giving evidence at the Royal Commission. Source: AAP
It included adviser service fees continuing to be deducted from a member's account after NULIS or another trustee had been advised of their death.
That occurred "for a period" or until the retirement benefit had been paid out, the inquiry heard on Wednesday.
It is understood about 4,135 super members may have been affected, involving fees totalling $3.01 million.
Ms Smith said the issue was identified in May this year, with regulators notified in June.
It followed an internal investigation into whether NULIS was deducting fees from people who had died in the wake of royal commission revelations involving Australia's largest bank.
The April financial advice hearing revealed some advisers at Commonwealth Bank subsidiary Count Financial continued charging clients fees after they died, in one case for more than a decade.
Ms Smith outlined other cases of adviser service fees being deducted from superannuation accounts when there was no service provided or no active adviser, as well as an issue with the fund administrator retaining fees instead of paying them to the financial planner.
The revelations come amid a wider fees-for-no-service scandal that may result in more than $850 million in compensation across the financial services industry, including from the four big banks and Australia's largest wealth manager AMP.
Commissioner Kenneth Hayne QC has raised the issue of whether the conduct involves breaking criminal or civil laws.
Mr Hayne asked Ms Smith: "Did you think yourself that taking money to which there was no entitlement raised a question of the criminal law?"
She replied: "I didn't."
Ms Smith noted ASIC was still investigating the final plan service fee matter.
