Retirement
Financial services giant taken to court over fees for no service
The corporate watchdog has commenced Federal Court action against one of Australia’s largest financial services companies over alleged charging of fees for no service and “misleading” conduct.
Financial services giant taken to court over fees for no service
The corporate watchdog has commenced Federal Court action against one of Australia’s largest financial services companies over alleged charging of fees for no service and “misleading” conduct.
The Australian Securities and Investments Commission (ASIC) alleged on Thursday that NAB’s wealth management divisions, NULIS Nominees and MLC Nominees “misled members” of MLC’s MasterKey superannuation products and received around $100 million in fees charged for no service.
ASIC alleges that NULIS and MLC Nominees received $33 million in Plan Service Fees from 220,000 members with MLC MasterKey Business and Personal Super plans, who did not have plan advisers.
According to ASIC, NAB also received $67 million in advice fees from 300,000 MLC MasterKey Personal Super members who did not receive advice, due to their no-adviser status.
These allegations follow a marathon questioning of NAB and NULIS executives at the the royal commission’s public hearings on superannuation in August. These hearings uncovered similar concerns, although NAB last week argued that consumers were its top concern.
The company also said findings that it had failed to act in its members best interests were unfounded, given the best interests duty in question is not actually an “obligation at large” to act in members’ best interests generally.
Commenting on the proceedings, ASIC said, “The commencement of this civil penalty action is part of ASIC’s broad-ranging and significant investigations currently underway into fee for no service failures in the financial services industry.
“Alongside these investigations ASIC is obtaining considerable remediation for impacted customers, currently estimated to exceed $850 million.”
ASIC alleged that MLC Nominees and NULIS;
- Breached the Corporations Act 2001 by “failing to ensure that its financial services were provided efficiently, honestly and fairly when it deducted approximately $33 million Plan Service Fees from 220,000 no-adviser members;”
- Made “false or misleading” representations to no-adviser members, and broke the Corporations Act again by suggesting that it was entitled to those fees;
- Contravened the Corporations Act by charging $67.1 million Plan Service Fees from the 300,000 MLC MasterKey Personal Super members without requiring plan advisers provide advice;
- Made more “false and misleading” representations to members by not making clear that they had the right to turn off the Plan Service Fee;
- Failed to obey financial services laws by issuing “defective disclosure documents” and “failing to exercise the degree of skill, care and diligence” required, and failing members’ best interests. As such, MLC Nominees and NULIS were in breach of the Corporations Act again.
ASIC is seeking a civil penalty and declarations of contravention against NAB from the Federal Court.
RELATED ARTICLES
Superannuation
Superannuation guarantee rate rises to 12 per cent as parental leave changes take effect
The superannuation guarantee rate has increased from 11.5 per cent to 12 per cent from Tuesday, with super contributions also being added to Commonwealth Parental Leave Pay for the first time. Read more
Superannuation
Rest's Sustainable Growth option achieves highest sustainability classification
Rest superannuation fund has achieved the highest sustainability classification for its Sustainable Growth investment option from the Responsible Investment Association Australasia. Read more
Superannuation
Aware Super slashes admin fees for retirees by up to 25 per cent
Aware Super has reduced administration fees for members with a retirement income account by up to 25 per cent and lowered the maximum annual fee. Read more
Superannuation
SuperAPI co-founder criticises Labor's superannuation tax as 'sneaky tax on young people'
The co-founder of SuperAPI has labelled Labor's proposed tax on superannuation balances above $3 million as a "sneaky tax on young people, tomorrow" disguised as a policy targeting wealthy retirees ...Read more
Superannuation
Election policies could reshape Australia's superannuation landscape, expert warns
Competing superannuation policies from Australia's major political parties could have significant implications for investors and retirees, according to a financial expert. Read more
Superannuation
Industry leaders weigh in on concessional super tax as Budget confirms $55bn investment
Changes to the taxation of superannuation earnings and contributions have drawn mixed responses from financial and payroll sector leaders, as the Federal Budget confirms over $55 billion in ...Read more
Superannuation
Call for indexation on super tax cap as $3m threshold draws criticism
A senior executive in the superannuation technology sector has criticised the Federal Government for failing to index the proposed $3 million superannuation tax cap, arguing the measure will unfairly ...Read more
Superannuation
Rest members back calls for fairer superannuation rules ahead of Federal Budget
Rest has called on the Federal Government to implement superannuation reforms aimed at improving fairness across the system, after member survey results showed strong support for a range of proposed ...Read more
Superannuation
Superannuation guarantee rate rises to 12 per cent as parental leave changes take effect
The superannuation guarantee rate has increased from 11.5 per cent to 12 per cent from Tuesday, with super contributions also being added to Commonwealth Parental Leave Pay for the first time. Read more
Superannuation
Rest's Sustainable Growth option achieves highest sustainability classification
Rest superannuation fund has achieved the highest sustainability classification for its Sustainable Growth investment option from the Responsible Investment Association Australasia. Read more
Superannuation
Aware Super slashes admin fees for retirees by up to 25 per cent
Aware Super has reduced administration fees for members with a retirement income account by up to 25 per cent and lowered the maximum annual fee. Read more
Superannuation
SuperAPI co-founder criticises Labor's superannuation tax as 'sneaky tax on young people'
The co-founder of SuperAPI has labelled Labor's proposed tax on superannuation balances above $3 million as a "sneaky tax on young people, tomorrow" disguised as a policy targeting wealthy retirees ...Read more
Superannuation
Election policies could reshape Australia's superannuation landscape, expert warns
Competing superannuation policies from Australia's major political parties could have significant implications for investors and retirees, according to a financial expert. Read more
Superannuation
Industry leaders weigh in on concessional super tax as Budget confirms $55bn investment
Changes to the taxation of superannuation earnings and contributions have drawn mixed responses from financial and payroll sector leaders, as the Federal Budget confirms over $55 billion in ...Read more
Superannuation
Call for indexation on super tax cap as $3m threshold draws criticism
A senior executive in the superannuation technology sector has criticised the Federal Government for failing to index the proposed $3 million superannuation tax cap, arguing the measure will unfairly ...Read more
Superannuation
Rest members back calls for fairer superannuation rules ahead of Federal Budget
Rest has called on the Federal Government to implement superannuation reforms aimed at improving fairness across the system, after member survey results showed strong support for a range of proposed ...Read more
