A letter from a NAB customer.

I went to the NAB for a home loan in 2006. I was then running a sole trader business that was making a very reasonable income, though my taxable income didn't reflect this, because of my level of deductions.
 
The bank told me they could only loan on my taxable income, but because my actual income was higher, I could pay double the required mortgage and have the property paid off in 7 years. At the time, I had a good 25% deposit on a reasonable inner city flat. Anyway, they suggested I see one of their financial planners.
 
There were two of them at my appointment, and they informed me that to buy at the top of the property market would be foolish, and since my rental situation was so good, to keep renting and put my savings into a margin loan.
 
The kicker is, I actually knew margin loans could magnify losses, so I said no.
 
But the two guys from the bank persisted, saying I would only be conservatively geared and it would take another 1929 to bring me into a margin call. What with Australia's resources boom etc, it was a no-brainer.
 
Late last year, I took a job overseas, where I have been ever since. My income is a lot lower than it was, and when the stock market started to slide, I informed the bank - both verbally and in writing - that I was not in a position to pay a margin call should one arise and would like to reduce the underlying margin loan. The adviser told me that reducing the loan would itself bring me into a margin call, so not to do it.
 
Anyway, I'm sure you can guess how this ends. At every turn I was advised to stay in the market - while other financial planning queries that didn't have to do with the margin loan were ignored. Even when I could see a stream of data from the US and the UK that clearly said the world was heading for trouble, the bank advised me that their advisers thought the financial crisis was a media beat-up.
 
I was hit with margin call after margin call, and after the first one, they didn't even bother to inform me. I finally sent them a sell order when I still had $15,000 left - and was advised that I was being 'highly emotional' and not to leave the market. A week later, that total amount was gone, and I was in debt to the bank for $2000. A small amount, compared to what other people have lost, but it still means my life savings are gone and I have to start again, at the age of 40. That flat I saved for is now totally out of my reach for the next decade.
 
Here's the kicker - after my money was gone, the bank advised me to take a personal loan for up to $50,000, to maintain my 'position in the market' and to take advantage of the volatility and any recovery. Just how I would recover my money, and take advantage of a recovery, while paying them 15% interest, they failed to explain.
 
It's very clear to me now that the NAB was not, in fact, offering financial advice of any kind, but selling me profitable, high-margin products. There is such a serious conflict of interest here, that it amounts to a scam.
 
It would be great to see a story about financial planners with more credibility than Storm who also ruined their clients! The conflicts of interest rife in so called financial planning really demand some sort of oversight.