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APRA slams CBA licensee for charging dead people

— 1 minute read

APRA has imposed additional licence conditions on CBA-owned Avanteos Investments after it charged more than $6 million in fees to thousands of dead superannuation members.

The registrable superannuation entity (RSE) licensee charged adviser service fees to the accounts of 2,234 deceased members between 2003 and 2018. 

The total financial impact has more than $6 million (inclusive of interest paid). All affected accounts have since been remediated. 

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Avanteos self-reported the issue to APRA in May last year and the case was subsequently referred to APRA by the royal commission in February. 

Following the completion of an investigation, APRA has placed a range of additional license conditions on Avanteos to prevent the breaches from reoccurring. 

The regulator was unable to use new civil penalty provisions against the licensee under the Superannuation Industry (Supervision) Act, which only came into effect in April. 

APRA deputy chair Helen Rowell said the regulator has liaised with ASIC, which is continuing its own investigation into the matter.

“We don’t rule out taking further action against Avanteos should ASIC’s inquiries raise additional matters of prudential concern,” Mrs Rowell said. 

“Charging fees for financial advice to deceased superannuation members, whether intentional or not, is a breach of superannuation licensees’ legal obligations.

“However, by imposing additional licence conditions, we are ensuring Avanteos is held accountable, and that any ongoing weaknesses in governance or internal controls are identified and remedied. That is especially important until such time that Avanteos has rectified the internal controls and weaknesses that allowed these breaches to occur.”

APRA has identified a number of other RSE licensees that may have charged fees to the accounts of deceased members. 

It said it is engaging with the entities to understand the cause and extent of the breaches, to determine the most appropriate supervisory response, including possible enforcement action.

 

APRA slams CBA licensee for charging dead people
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Sarah Simpkins

Sarah Simpkins

Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth. 

Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio. 

You can contact her on [email protected].

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