The corporate regulator has alleged that from 1 April 2013 to 30 June 2018, StatePlus charged at least 36,592 members fees for financial advice it promised to provide but did not. The conduct was said to include the promise of an annual financial planning review and the contact of members as part of the review.
At the time, StatePlus was the RSE licensee for the StatePlus Fixed Term Pension Plan and the StatePlus Retirement Fund, which both held more than $17 billion in funds under management and around 75,000 members as at 30 June 2017.
First State Super came to acquire StatePlus in June 2016, when it said it “became aware of numerous instances where… clients had not received a promised annual review”.
The fund stated it then self-reported the issues to ASIC and undertook an organisation-wide investigation.
ASIC’s claim will argue the company issued defective disclosure documents or statements that included promises to provide advice to members in circumstances that StatePlus did not have reasonable grounds for believing it could provide.
ASIC also said it had failed to establish and maintain the appropriate internal procedures, measures and controls to ensure that it could provide or would be able to provide the promised annual advice.
Further, StatePlus has been accused of contravening its overarching obligations as an AFSL holder to act efficiently, honestly and fairly.
ASIC is seeking declarations and penalties from the Federal Court, with the maximum civil fine for the alleged contraventions being between $1.7 million and $2.1 million per breach.
StatePlus has remediated more than $100 million to members affected by the misconduct.
The company was a case study during the royal commission. ASIC’s proceeding against it is the third enforcement action it has taken for fees-for-no-service activity.
“While the period under review largely [predates] our ownership of StatePlus, as the new owner we have recognised the issue, promptly rectified it and ensured all affected clients were refunded,” First State Super stated on Thursday.
“We have also put in process improvements to ensure that this issue does not happen again.”
In 2018, ASIC commenced cases against NAB wealth entities NULIS Nominees and MLC Nominees for fees for no service activity.
Similarly, in December 2019, ASIC commenced civil penalty proceedings against NAB for alleged contraventions of the ASIC Act and the Corporations Act for charging fees for no service. The case is yet to be scheduled for trial.
