ASIC has announced that Maritime Super has paid $26,640 to comply with two infringement notices concerning alleged misleading statements made to members about its investment partnership with Hostplus.
Maritime Super stated that its investment partnership with Hostplus would result in reduced overall investment management fees for its members in a significant event notification and a newsletter sent to members between March and June last year.
ASIC said it was concerned these statements were misleading because the investment partnership resulted in increased investment costs for 77 per cent of Maritime members and higher investment fees for six of Maritime’s 11 investment options.
“The superannuation industry is going through a period of consolidation and change. As such, it is crucial that consumers and fund members are provided accurate information so that they can make informed decisions about their super,” said ASIC deputy chair Sarah Court.
“In this case, we were concerned that Maritime members may have been misled by the communications about fees.”
Maritime issued a corrective disclosure to members in August last year at the request of ASIC and confirmed that some Maritime members may face higher investment fees and costs as a result of the investment partnership.
“ASIC has a number of regulatory tools to address alleged misconduct where we are concerned that consumer harm may occur, including the issuing of infringement notices,” said Ms Court.
“We remain focused on protecting consumers’ interests and will take enforcement action where necessary to ensure that superannuation trustees comply with their obligations to provide accurate information to members.”
Would it be correct to suggest that the 77% of members who experienced higher fees (despite it only being for a short time) should be retrospectively reimbursed?
Lets say you are a Trustee of a make pretend super fund. We’ll call it “Bob’s Super”. You have $5 billion in members savings over 25,000 accounts and increase the fees of your investment products by 0.06% p.a.
($5,000,000,000 FUM x 0.0006 Increase) = $3,000,000 per annum.
Divide this by 365 and you get $8,219 per day extra that your members are paying for services.
This is $250,000 per month.
Dover was fined $1.2 million by a Federal Court judge, business ended, lives ruined, customers being Advisers and clients needing to find new providers……these guys were fined $27,000 and all is good. I had nothing to do with Dover but can recognize the corruption here.
So ASIC is both corrupt and negligent. This needs to taken further by those that represent us…oh wait that’s no one.
How is it that ASIC can issue a statement saying “Mary” the planner issued defective fee disclosure statements and breached the corporations law (effectively ending her career) due to a spelling mistake or some other “minor” detail, transposed date etc and apply a $50,000 to $100,000 fine per occurrence plus criminal penalties but on this occurrence a Union Super fund is fined $27,000 for something impacting 77% of it’s customers.
If this was CFS etc, they would be in court defending a much bigger penalty, as well as a Class Action by the ‘usual suspects’….
The irony of fining a fund for lying to it’s members about fees. That fine will be handed on to the members in the form of higher fees as there is no parent company to pay the fine.
Perhaps the Directors, CEO etc might dip into their pockets. Very much doubt it. Run just for the benefit of members they say.
ASIC’s double standards at it again….when will this end, FFS??
Why are they merging if fees will increase in most cases?
Also, a $26k fine is not going to deter anyone.
Paid by Members anyway..?
‘By members for members’ isn’t that there motto
Compare the pair.
I doubt they will have to go to the expense of notifying all their members – that is only required of those naughty ‘retail’ funds. Sounds like the RC was a waste of time.
If it was a bank, add a couple of zeroes….
Typical of the ASIC. Adviser would be band. The super fund gets a slap of the wrist. When will this stop? Complete contradiction,
Anyone lose their job over this? Of course not it was an union fund and everyone knows ASIC wont punish their mates. If it was an adviser who made a similar misleading statement, then they would be named, shamed, banned, fined and potentially jailed. No wonder advisers are leaving in droves.
not just union funds…….not one person from the banks, AMP, etc have been named, shamed, banned…..after being responsible for billions of dollars in things like fees for no service, selling junk insurance, not complying with AML regs. Shameful
How many advisers do you reckon understand their aml requirements?
So MS lie to clients about the fees they charge and they get hit with a $26,000 fine.
But a few weeks ago we saw an adviser who lied to get around WA lockdown laws and he gets banned for years.
I am not suggesting the adviser should get off scott free, but surely if a super fund lies about the fees they charge, shouldn’t at least one of their executive be held to account and booted from the industry….
Another great piece of work ASIC.
He didn’t ‘lie’, he committed a fraud and was charged for it.
I think this contravenes ASIC requirements, Code of Ethics and most likely his clients own sense of honesty that they would want from their Adviser (except maybe other Demons fans…?). With or without being banned, I’d say his business was sunk, anyway.
I don’t disagree with you re the advisers business, but my comment was around the fact on one hand an adviser commits fraud that doesn’t directly impact his clients and he is banned, but on the other we have a super fund that commits fraud (ie they intentionally made a false representation about the fees they were charging their members) and they get a $26,000 fine.
I agree, MS have got off VERY lightly…..
Are you serious.. Regardless, MartimeSuper has also lied and also committed fraud but the penalties are huge ends of the spectrum. So his business will naturally be ruined, he’ll probably never work again, staff are out of jobs and he still copped a fine and jail time. $27,000 is ridiculous. It sends a message you can do anything so long as you make political donations.
Lets follow your logic ( and I could be completely wrong on all points)
Adviser – Fraud and convicted
Super Fund – Lie and no conviction
Adviser – Code of Ethics issues (personal life and professional ethics code)
Super Fund – do they have a code of ethics?
Adviser – “…clients own sense of honesty that they would want….”
Super Fund – I guess members have no such expectation – is that your point?
Adviser – my understanding – no clients were impacted by the actions.
Super Fund – Not sure if any members were impacted – but when were the interests in the members really that important – it’s more about the headline isn’t it?