Signing on the dotted line is considered a solemn act, something that involves the utmost care and consideration.

This could be particularly so when holding a pen above a forum that will determine who will rightly receive your superannuation should you die.

But for financial planners, the task of getting documents signed and witnessed can be monotonous and time consuming - time that could be spent meeting ever increasing sales targets.

That may explain why financial planners inside National Australia Bank's wealth division have been routinely cutting corners.

In particular many in NAB's hundreds-strong workforce have apparently been falsely witnessing death beneficiary forms - legally binding documents that determine who gets a person's superannuation when they die.

The practice is not illegal but marks a significant breach of the bank's code of conduct and may impact its licence conditions as well as potentially causing headaches for those working through the estates of deceased clients.

The revelation comes at a time when the banking industry it is trying to salvage its reputation in the wake of other scandals affecting wealth and superannuation customers and as the big banks make renewed pledges to rebuild trust within the community as they fight the government's new $6.2 billion bank levy.

Fairfax Media can reveal NAB financial planning became aware of instances of "false witnessing" in November last year during a routine review of an adviser.

Since then it has made moves to investigate the problem internally.

It is understood the breaches, which involve planners incorrectly witnessing documents in the absence of clients, could go back more than five years and involve people across its planning network.

The bank says it believes no client is out of pocket due to the practice and is not yet aware of any client that has been negatively impacted.

"We've become aware that some of the nominations have not been completed completely," NAB head of financial planning Tim Steele told Fairfax Media on Friday.

"This is clearly wrong and inconsistent with our expectations and code of conduct."

Planners 'scapegoats' for systemic problems

Illustration: Simon Bosch

Despite that assessment, NAB has opened an amnesty for planners who "self-report" the misconduct, meaning those that come forward will avoid being terminated and instead have up to 25 per cent cut from their bonus.

That arrangement was announced to a national meeting of financial planning staff on May 10.

NAB notified the Australian Securities and Investments Commission on May 18 - six months after the bank first became aware of the issue.

ASIC said it was aware of the matter but would not say what actions, if any, it would take.

NAB said it had not contacted any customers about the matter as of Friday.

The Financial Services Union, which as been vocal in criticising the sales culture of the big banks, says false witnessing has been standard practice for years and the bank was making planners scapegoats for a systemic problem.

"This is a culture designed to maximise and achieve sales revenue at all costs," FSU National Secretary Julia Angrisano said.

"We can't have another example of frontline workers being thrown under the bus because of something that is systemic in practice.

"We need to look higher up and ask how was this the case for so long?"

The bank denies that high sales targets are pressuring low-level planners into falsifying documents.

"We don't believe there was any ill-intent here," Mr Steele said.

'Moving things forward'

NAB chief executive Andrew Thorburn. Photo: AAP

In an email to financial planners on Tuesday, Mr Steele said while not condoning the behaviour, the bank acknowledged the misconduct may have happened "in the spirit of moving things forward" for customers.

"There is no indication that anyone received any personal gain in not following the correct process," he told planners.

He has also said junior staff could bet let off the hook (as demanded by the union), saying consideration would be given to any "direction or expectation" that was issued by senior planners.

"While all employees are accountable for their actions, a different outcome may be appropriate in circumstances where the support staff team member is able to demonstrate they acted under instruction/direction from a financial planner or senior staff member," he said.

NAB would not say how many instances of false witnessing it had encountered, but the union has been told there are 17 cases being investigated, many understood to be junior staff acting under instruction.

Trustees retain discretion

Photo: Rob Homer

The focus of the problem is death beneficiary nominations.

The nominations are legal documents that determine who gets a person's superannuation or life insurance when they die.

The forms generally require two witnesses to sign the form at the time they are completed. If the forms are rendered unbinding, the trustee has full discretion over who gets the money.

Andrew Simpson, an estate lawyer at Maurice Blackburn, said the breaches could have serious ramifications for customers, given the forms are designed to speak on behalf of a person after they die.

"If that nomination falls over because it wasn't witnessed properly, then the trustee retains discretion as to who to give the money to," he said.

"The purpose of the nomination would be defeated."

It is the second misconduct issue inside NAB's wealth division relating to superannuation customers after it was revealed in February that it had overcharged members and knocked back insurance claims to seriously ill customers.

ASIC imposed extra licence conditions on NAB's super trustee in response to the breach, which has forced to pay $36.5 million in compensation to 220,000 customers.

Mr Steele says failure to witness documents correctly may be a breach of the bank's licence conditions but it was not clear whether it rendered the documents void.

Broken trust

The timing could not be worse for NAB, who like the other big banks are trying to win back trust with the community in a battle over the government's new $6.2 billion bank levy.

ANZ chairman David Gonski told shareholders on Thursday the tax was further evidence of a breakdown of trust between the banks, parliament and the community.

"Our aim is to work even harder to help repair the relationship for the good of shareholders and of all Australians," he said.

"We acknowledge that this will require us to think and act differently."

It is unclear whether the practice of false witnessing is occurring in other parts of the industry, the FSU could not say whether its members had faced similar problems.

AMP chief executive Craig Meller said he was not aware of any instances of false witnessing and condemned the practice.

"Frankly, if we found people doing that they would be dismissed," he told Fairfax Media.

Westpac, which owns BT Financial Group, said it was also unaware of any instances of false witnessing by its planners.

"BT expects all its advisers to adhere to correct process and procedures," a spokesperson said.

"We have strong compliance and monitoring procedures in place and will take action against advisers as appropriate who may breach these standards."

A review by the corporate watchdog in March revealed the banks are taking up to six months report misbehaving advisers to the regulator.

It also found nearly half of the advisers the banks knew to be dishonest, incompetent or fraudulent had not been disclosed to the watchdog.

"They need to take some responsibility here - the regulator can't hold their hands," ASIC deputy chairman Peter Kell said at the time.

ANZ told Fairfax Media it had "zero tolerance" for document alteration but that problems with signatures were "extremely rare".

"If we believe the correct process for witnessing a document hasn't been followed, our policy is to inform the client and re-execute to ensure the documents are effective and binding," a spokesperson said.

"If we identify signature fraud concerning a financial planner we will report it to ASIC and terminate the planner."

CBA would not comment on whether it was aware of instances of false witnessing or say what its policy was for advisers who acted inappropriately.

NAB faced a storm of criticism in Parliament in March after it was revealed it had failed to discipline and instead rewarded a senior banking executive who was in charge of its troubled wealth division.

Head of wealth Andrew Hagger was singled out in the inquiry for receiving 120 per cent of his bonus despite the scandal. He has since said he feels "deep accountability" to customers.