On Wednesday, the Federal Court declared Colonial First State Investments Limited (CFSIL), as trustee for the Colonial First State FirstChoice Superannuation Trust, liable for misleading superannuation members regarding investment directions on at least 12,978 occasions.
“The contraventions relate to communications CFSIL made between March 2014 and July 2016 to some members of the First State FirstChoice Superannuation Trust (FirstChoice Fund) following the introduction of section 29WA of the Superannuation Industry (Supervision) Act, which requires that all superannuation contributions be paid into a MySuper product, unless the trustee has received a valid member investment direction,” CFS said in a statement.
“The communications were made to members by way of letters and telephone calls.
“Consistent with CFSIL’s admissions, the court found that CFSIL communicated with members of the FirstChoice Fund in a misleading or deceptive manner regarding the provision of an investment direction to stay within CFSIL’s FirstChoice Fund rather than transitioning to CFSIL’s MySuper product. The court also found certain other related breaches of the Corporations Act.
“CFSIL apologises unreservedly to members impacted by these issues. Remediation of the calls is over 99 per cent complete and is expected to be finalised in October 2021.
“CFSIL will remediate members affected by the letters and is working to complete this as quickly as possible.”
A penalty hearing is expected to go ahead on 12 October.
ASIC should be levying organisations like CFS to fund their regulatory costs. Not financial advisers who are continuing in the profession because they are qualified and doing the right thing. Get your funding from those who aren’t doing the right thing. They are the problem.