The Australian Securities and Investment Commission (ASIC) has today commenced civil penalty proceedings against former ANZ (ASX: ANZ) subsidiary OnePath - a superannuation trustee - for allegedly charging fees for no service and making false and misleading representations to fund members.
OnePath, now known as Insignia Financial Limited and owned by IOOF Holdings (ASX: IFL), allegedly incorrectly charged more than $4 million in fees to more than 18,000 fund members when it was not entitled to do so.
“Superannuation is important for the future financial security of Australians. 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,” ASIC deputy chair Sarah Court said.
The watchdog alleges that from 15 December 2015, OnePath charged financial advice service fees totalling $3,787,966.21 to 16,210 members who had been de-linked from their employer-sponsored superannuation plans.
ASIC alleges that OnePath sent these members letters and annual statements until about May 2020 which failed to inform them of their rights regarding adviser service fees, including their right to terminate the fees.
It is also alleged that from December 2015 until about January 2019, OnePath incorrectly charged financial adviser service fees totalling $502,667.18 to 2,508 members who did not have a linked plan adviser. ASIC also alleges that OnePath sent annual statements to these members until about October 2019 representing it was entitled to deduct adviser service fees from their accounts and that they were obliged to pay.
ASIC claims that OnePath made false and misleading representations about its right to continue charging fees to these members, engaged in misleading or deceptive conduct and breached its obligations as a financial services licensee to provide services efficiently, honestly and fairly.
In the Federal Court ASIC is seeking declarations, pecuniary penalties and other orders. The date for the first case management hearing is yet to be scheduled.
OnePath has advised that as of September 2021, ANZ and OnePath have paid more than $32 million in remediation for loss from mischarged adviser service fees. OnePath’s remediation program is substantially complete.
“Insignia Financial and OPC are carefully considering ASIC’s action,” Insignia Financial said.
“Separate to any question of liability, OPC and ANZ are remediating impacted members, with OPC’s remediation expected to be completed by the end of this month. Insignia Financial remains committed to ensuring OPC’s identified Plan Service Fee issues are appropriately resolved.
“Insignia Financial continues to focus on developing and implementing its roadmap of product and platform simplification and we are confident this program will improve member outcomes.”
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