APRA takes action over fees charged to dead super members
APRA has placed additional conditions on a Commonwealth Bank-owned licensee after it charged adviser service fees to thousands of dead superannuation members.
Avanteos, which is a registrable superannuation entity (RSE) licensee, charged adviser service fees to the accounts of 2,234 deceased members between 2003 and 2018, of which the total financial impact was more than $6 million (inclusive of interest paid), APRA said in a statement.
All affected accounts have since been remediated.
APRA said Avanteos self-reported the issue to them in May 2018. The case was subsequently referred to APRA in February this year by the Hayne royal commission.
Following the completion of its investigation, APRA said it imposed a range of additional licence conditions on Avanteos designed to avoid any such breaches reoccurring.
Due to the historic nature of these breaches, APRA said it was unable use new civil penalty provisions under the Superannuation Industry (Supervision) Act 1993, which only came into effect in April this year.
APRA deputy chair Helen Rowell said charging fees for financial advice to deceased superannuation members, whether intentional or not, is a breach of superannuation licensees’ legal obligations.
“However, by imposing additional licence conditions, we are ensuring Avanteos is held accountable, and that any ongoing weaknesses in governance or internal controls are identified and remedied,” Mrs Rowell said.
“That is especially important until such time that Avanteos has rectified the internal controls and weaknesses that allowed these breaches to occur.
“APRA has been liaising with the Australian Securities and Investments Commission (ASIC), which continues to conduct its own investigation into these matters. We don’t rule out taking further action against Avanteos should ASIC’s inquiries raise additional matters of prudential concern.”
APRA said it has also identified several other RSE licensees that may have charged fees to the accounts of deceased members.
The prudential regulator added that it is engaging with those entities to understand the cause and extent of any breaches, and determine the most appropriate supervisory response, including possible enforcement action.
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