Firm misled customers about its right to charge fees, regulator says
The Federal Court has ruled against superannuation trustee OnePath Custodians, imposing a $5 million penalty for engaging in false or misleading practices regarding its right to charge fees and for failing to provide efficient, honest, and fair services to its members, according to the Australian Securities and Investments Commission.
The ruling comes shortly after ASIC's recent penalty decision against Mercer Financial Advice, which resulted in a $12 million fine for unauthorised fee charges.
Between December 2015 and November 2021, OnePath deceived members of its superannuation product, “Integra Super,” by making false or misleading representations about adviser service fees, according to ASIC. During this period, the company deducted a total of $3.8 million in fees from members for advice services they never received.
OnePath wrongly informed members that they were obligated to pay a fee for advice from a “plan adviser,” even after being transferred to a division of Integra Super where they were no longer entitled to receive such services. This misleading conduct resulted in the deduction of fees from member accounts without proper basis.
ASIC Deputy Chair Sarah Court (pictured above) said that member service failures and misconduct leading to the erosion of superannuation balances will be a key focus for ASIC in 2024.
“This case highlights the importance of a super trustee charging fees correctly and providing accurate, clear and timely information to members about superannuation fees,” Court said. “Members should be confident that their retirement savings are not reduced over time by superannuation trustees making deductions from their accounts they are not entitled to make. ASIC will continue to focus on misconduct that results in the erosion of super balances.”
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OnePath also misled members by falsely representing that the fee had been agreed upon between the member and their former employer, rather than the plan adviser. Additionally, the company claimed that fee negotiations were solely the responsibility of the member's former employer and the plan adviser, disregarding the member's own right to cancel the fee, ASIC said.
During the mentioned period, OnePath sent misleading letters to approximately 766 members and provided annual statements containing false or misleading information to around 15,962 members.
OnePath has admitted to the misconduct and agreed to pay the $5 million penalty. The court also ordered the company to publish a notice on its website, highlighting the breaches and the subsequent actions taken.
In another ASIC case, the Federal Court also recently ruled that ANZ had violated continuous disclosure laws during a $2.5 billion institutional share placement in 2015. ASIC also recently announced that it had banned a former CEO from working in the financial sector for abusing his position.
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