The Federal Court has ordered superannuation trustee OnePath to pay a $5 million penalty for making false or misleading representations about its right to continue charging fees, and for failing to provide services to members “efficiently, honestly and fairly” due to its “misleading conduct” and by deducting fees when not entitled to do so.
The court found that, between December 2015 and November 2021, OnePath made false or misleading representations to members of the super product Integra Super about adviser service fees and deducted $3.8 million in fees from members for advice services they did not receive.
OnePath told members they had to pay a fee for advice from a “Plan Adviser” even after the member had been transferred to a division of Integra Super where they were not entitled to receive advice services.
Australian Securities and Investments Commission (ASIC) deputy chair Sarah Court recently announced that member services failures and misconduct resulting in the erosion of superannuation balances will form a part of the enforcement priorities for ASIC in 2024.
“This case highlights the importance of a super trustee charging fees correctly and providing accurate, clear, and timely information to members about superannuation fees,” Ms Court said.
“Members should be confident that their retirement savings are not reduced over time by superannuation trustees making deductions from their accounts they are not entitled to make.
“ASIC will continue to focus on misconduct that results in the erosion of super balances.”
The regulator said that OnePath also misled members by representing that:
- The member had agreed to the fee, when it had been agreed between the plan adviser and the member’s former employer.
- The negotiation of the fee was a matter for the member’s former employer and the plan adviser, even though the member had their own right to cancel the fee.
During this period, ASIC noted that OnePath issued letters to approximately 766 members and annual statements to approximately 15,962 members, containing the false or misleading representations.
OnePath admitted to the conduct and agreed to a penalty of $5 million. The court also ordered OnePath to publish a notice on its website regarding the breaches.
ASIC chases Onepath for $3.8m in fees yet doesn’t do anything about $350 million lost with Dixon Advisory during the same period. Tell me, what should have been their priority?