In a statement on Wednesday, the corporate regulator said it has commenced civil penalty proceedings in the Federal Court against superannuation trustee OnePath for allegedly charging $4 million in fees to more than 18,000 fund members when it was not entitled to do so.
According to ASIC, from 15 December 2015, OnePath charged financial advice service fees totalling $3.8 million to 16,210 members who had been de-linked from their employer-sponsored superannuation plans.
OnePath is believed to have excluded information about adviser services fees, including a member’s right to terminate, from letters and annual statements, which it continued to send until May 2020.
Moreover, ASIC noted that OnePath also incorrectly charged financial adviser service fees totalling $502,667.18 to 2,508 members who did not have a linked plan adviser from December 2015 until about January 2019.
The corporate regulator found that this time OnePath informed members in their annual statements that it was entitled to deduct adviser service fees from their accounts and that they were obliged to pay.
As such ASIC has described OnePath’s behaviour as “false and misleading”, noting the trustee breached its obligations as a financial services licensee to provide services efficiently, honestly and fairly.
“Consumers must be able to trust they are being charged fees correctly by their superannuation providers. ASIC’s case alleges that OnePath failed to do so in this case,” said ASIC deputy chair Sarah Court.
ASIC is seeking declarations, pecuniary penalties and other orders from the Federal Court.
The date for the first case management hearing is yet to be scheduled by the court.
by the time this case is heard/settled, all impacted customers will have been remediated plus interest so is a waste of resources – maybe ASIC should spend more time looking at the Nuix IPO…..millions of dollars lost by investors there
Though of course as long as they line ASIC’s pockets with a fine there will be no ban from the industry, no loss of licence and no real loss of income to them. It wouldn’t be the same if it was an Adviser who had been found guilty of such things – they’d be in jail already and with a permanent ban.
Pretty sure advertising that your fees are only $1.50 per week, for 20 plus years by our good comrades at Hesta and Hostplus would be considered as “false, deceptive and misleading” as well. but hey they’re a protected species are they?…thankfully the addition, since say 2019 of a small asterisk next to the $1.50 in smaller writing saying additional charges apply helps.
What are the costs of litigation versus the benefit paid by Onepath. Does this represent value for money? It seems rather puerile from ASIC.
It will cost ASIC nothing. This is being funded by law-abiding, independent financial advisers. Josh Frydenberg gave ASIC a blank cheque and they are having a party. The recent reprieve is a smoke screen leading up the the election. Soon after, ASIC will get back to spending our money on whatever pet projects they like and most especially, thinking up new ways to tighten the strings on our red-tape and compliance straight jacket.
chest beating
$210 per client! One can only assume Onepath refunded the fees with interest. What is the point of this litigation?
not wrong. ASIC are just trying to flex their muscles after being asleep at the wheel for so long.