Mr Wilson questioned ASIC commissioner Danielle Press in Monday’s hearing of the committee around whether the regulator was taking a close eye to Aware Super’s remediation program for advice subsidiary StatePlus, a business the then First State Super purchased in 2016.
Mr Wilson questioned whether remediation funds were being paid for “out of member reserves”, to which Ms Press said she believed refunds were being made out of “the operational risk financial reserve”.
“One of the reasons they would have established [the reserve] would be to remediate members,” Ms Press said.
“The Aware remediation was from StatePlus, which is a different institution and is not a super fund. StatePlus, which is owned by Aware but it is a subsidiary of. My understanding was [the remediation] was taken from StatePlus revenue, but I would need to take that on notice to be absolutely clear.”
While ASIC had recently been given expanded powers as a conduct regulator for the super sector, and had 20 enforcement actions currently in play against funds, Ms Press said the appropriateness of the use of reserves was “a matter for APRA”.
“There are different obligations of board directors and trustees of super funds when it comes to making decisions around where money is to be sourced from for remediation and other matters, so that may be an issue for APRA regarding the trustees of super funds,” ASIC deputy chair Karen Chester said.
However, Ms Press said she believed “hypothetically” that if funds were paying remediation amounts out of specially established operational risk reserves, this would be in line with their obligations to members.
If it isnt the case that Aware are using member funds for the remediation, will Tim Wilson apologise? As this was said in a committee setting and not in the chamber, is he still protected by the privilege that Coward’s Castle affords him? I’d like to see them sue him for all the 5 or 6 negatively geared homes that he’s worth. Even with all his Smirko approved attacks on super, poor Tim still cant get into the ministry….
Oh oh looks like Tim has stirred up some of the bees around the honeypot.
This problem is not fully attributable to state plus. First state super had its own huge book of clients paying ongoing advice fees for years. No way in hell all these clients received the services they were paying for. If they did it would be at odds to every other licensee that has had some fee for no service issues servicing large books.
Aware Super Members paying twice for the StatePlus acquisition.
First, when Aware (the First State Super) bought StatePlus for $1 Billion, followed by a $400M writedown less than 5 years later (via a complex promissory note).
And now, paying for StatePlus remediation on fees-for-no-service.
Way to go Aware.
Looks like legislative arbitrage here. One regulator handballs to another, and in the end nothing is done.
I’m curious… where should the fund pay the remediation from, considering the profits go to the reserve? Rob it before the reserve, or after in the reserve? What am I missing?
Yeh the Not for Profits Funds are experts at shifting ALL the Profit to themselves, via their Union board seats, via Union or Trustee owned Administration services, via union owned Fund Managers.
Not for profits – what an absolute joke, Industry Super Funds are making billions in profits, it’s just syphoned sideways away from the actual Super Fund and also away from the members.
So called Not For Profit Industry Super is making plenty of hangers on LOADS OF PROFIT !!!!
These profits can be diverted to pay remediation but then the Unions lose profits so they will try to take it directly from members balances.
We’re All in This Together – say the Unions, the Directors, the Board members – All in this RORT together.
im not sure there is a lot of facts in this diatribe
You obviously aren’t joining in the witch hunt.
Yet another good reason to establish your own SMSF. Just incredible corruption
Said the accountant who wants the admin fees, or the financial adviser who wants to charge a few thousand a year to provide investment advice. Nah thanks.
Yes, because an SMSF could only be recommended or used for the benefit of an Accountant or Adviser couldn’t it Anon. You apparently have the short-sightedness and ignorance of the average ASIC analyst and I pity some of your clients for it’s them who no doubt suffer your lack of understanding or knowledge.
So funny. I’d like to see AwareSuper advisers explaining what the Fixed Interest portion of their investments are. “Well Peter, we’ve used your money to create Corporate Bonds in order to buy Stateplus and then of course we had to devalue them”… “and now they’re using your money still, to pay back Paul and his fees for no service” …”you’ve heard of the saying robbing Peter to Pay Paul..that’s the fixed interest investments you’re investing in”.. “Not quite a Ponzi scheme because we’ve got SGC rises hopefully coming in and we’ve got too many people to look after.”
Bang . Good handball
union super scum bags. Unions have no place in super and should be removed, they will use member funds for any self – serving purpose.
You do realise that aware has no union affiliation, right?
Arent John Dixon, Naomi Steer, Mark Morey, Rosemary Kelly, Antoinette Masiero,
Travis Bates appointed by Unions?
Wrong. They are the super fund controlled by the NSW Public Sector union. Formerly known as First State Super. Even had one of their dodgy union official board members sent to jail a little while back.
I’ve worked for industry funds with outrageous links to unions. Not the case here.
You are asking the wrong entity to investigate the misuse of funds. The most senior people in ASIC think there is no problem with using others money for their own personal expenses. If you ask ASIC to look into this it will just be another tick for union funds, who will never be properly investigated or made accountable for the rules everyone else has to follow.
When a government employee (particularly of a corporate regulator) steals/uses money fraudulently of a client (in this case the tax payers) everything is made better by repaying it. When an Adviser doesn’t complete paperwork in a way a regulator would like, even with no loss or danger to clients, they potentially lose their license, job and career. If they stole money they’d go to jail. Fair?