In the past year, some of Australia’s biggest firms have caught the attention of ASIC for a range of different issues. Here are some of the most notable moves the regulator has taken:
Aware Financial Services
In February, Aware Financial Services — the advice arm of Aware Super formerly known as State Super Financial Services — was fined $20 million for charging customers fees for financial services it did not provide.
Between 21 August 2014 and 30 June 2018, Aware FS was found to have charged 25,300 customers $50 million in total in fees for advice services.
At least 17,500 customers were provided written disclosure documents advising that they would receive an annual financial planning review, and another 7,800 customers entered into ongoing advice service arrangements, but Aware FS did not provide the promised services.
ANZ
ASIC announced in May that it was suing ANZ for allegedly misleading its customers as to the available funds and balances in their credit card accounts.
According to the regulator’s allegations, around 165,750 ANZ customers were charged cash advance fees and interest for withdrawing or transferring money from their credit card accounts based on an incorrect account balance between May 2016 and November 2018.
The matter has been listed for a case management hearing on 14 April 2023 at 9.30am.
Dixon Advisory
ASIC suspended the Australian Financial Services (AFS) licence of Dixon Advisory & Superannuation Services in April this year after it filed for voluntary administration in January.
Then in September, the Federal Court imposed a $7.2 million penalty on the firm after six representatives were found to have failed to act in their clients’ best interests and failed to provide advice appropriate to their clients’ circumstances.
In addition to the penalty, Dixon Advisory was ordered to pay ASIC’s legal costs of $800,000.
AMP
The Federal Court handed out penalties of $14.5 million to five AMP companies in September for charging fees for services that were not provided to 1,452 superannuation members.
The court found that, between July 2015 and September 2018, AMP deducted $356,188 in fees even though it was aware that the members had ceased their employment and could no longer access the advice services.
“AMP was aware it was charging fees for no service to these members but did not take the proper steps to prevent it from continuing,” ASIC deputy chair Sarah Court said at the time.
Mercer
At the end of June, ASIC confirmed civil penalty proceedings against Mercer Financial Advice for allegedly making false or misleading representations to its customers about fees charged and services that were not provided, and for failing to provide fee disclosure statements.
Among ASIC’s allegations are that, between July 2016 and June 2019, Mercer made false or misleading representations on more than 5,500 occasions by, among other things, claiming it had provided all of the services it was required to provide when it had not.
The penalty hearing concluded on 5 December, with ASIC noting that judgement has been reserved.
Perpetual
ASIC issued interim stop orders preventing Perpetual from offering or distributing two funds to retail investors in November because of deficiencies in their target market determinations (TMDs).
The interim orders stopped Perpetual from issuing interests in, giving a product disclosure statement for, or providing general advice to retail clients recommending investment in the two funds — Perpetual Pure Microcap Fund and Perpetual Geared Australian Share Fund.
In response to proposed amendments to the TMDs put forward by Perpetual, which ASIC said addressed its concerns, the interim stop orders were revoked on 8 December and no final stop orders were made.
Commonwealth Bank and Colonial First State
In October, ASIC appealed the Federal Court’s earlier decision to dismiss the regulator’s proceedings which alleged that Colonial First State (CFS) and the Commonwealth Bank (CBA) breached conflicted remuneration laws.
The regulator claims that CFS and CBA breached the laws when they reached an agreement in which CFS paid CBA to distribute its Essential Super product through CBA’s branch and digital channels. Essential Super was distributed to over 390,000 individuals.
An appeal hearing has been listed for 22 and 23 February 2023.
Vanguard
With ASIC making enforcement action against greenwashing a current priority, the regulator issued three infringement notices to Vanguard regarding the issue in December.
ASIC said that it was concerned that product disclosure statements for the Vanguard International Shares Select Exclusions Index Funds may have been liable to mislead the public by overstating an exclusion, otherwise known as an investment screen, that claimed to prevent investment in companies involved in significant tobacco sales.
Vanguard paid $39,960 in compliance with the infringement notices on 1 December, with ASIC noting that “payment of an infringement notice is not an admission of guilt or liability”.
