ASIC mulls further action on industry fund ‘advice breach’

In responses to questions on notice from House economics committee chair Tim Wilson, ASIC said it was “considering whether to make further inquiries” into the matter, which was raised in the royal commission into union corruption in 2015.

“We know in the royal commission, TWU Super paid officials $150,000 a year to encourage employees to sign up to their super fund,” Mr Wilson said in a previous hearing of the committee. 

“So, would that be considered the basis of financial advice, or have you not reviewed the royal commission's report?”

The interim report of the inquiry stated that TWU Super subsidised the wage costs of the TWU’s superannuation liaison officers, who were existing employees of the union tasked with “acting as a liaison between TWU Super and its members”.

The report said the fund typically paid 50 per cent of the officers’ wage costs, or “such other amount as is determined by the TWU branch secretary at his discretion”, with payments ranging between $63,000 and $164,000 per branch.

TWU Super’s then chief executive William McMillin told the commission the officers were tasked with undertaking promotional activities for the fund, such as holding events at local work sites, for at least 50 per cent of their working hours.

TWU Victorian assistant branch secretary John Berger, who was employed in the position in 2011 also gave evidence to the commission that his duties had included “making members love the fund” and “reaching out to the TWU and employer associations to gain as many members for the fund as possible”.

With the commission at the time having referred to evidence around the duties of superannuation liaison officers as “amorphous”, ASIC also concluded there was not sufficient information to assess whether the activities of the officers could constitute advice.

“The report has only very limited information about the activities of SLOs. It is not possible for us to reach any conclusions about whether the SLOs were providing financial advice in contravention of any law based on that information,” the regulator said in response to Mr Wilson’s query on the issue.

ASIC also said it had made some initial inquiries into the issue, but had so far “not found information to indicate that the SLOs were providing financial product advice”.