The corporate regulator has commenced civil penalty proceedings against Asgard Capital Management in the Federal Court after finding it charged fees for no service to 404 customers and failed to act “efficiently, honestly and fairly”.
ASIC alleges that from September 2014 to August 2017, Asgard charged customers around $130,006 for financial advice after requests were made for customers’ financial advisers to be removed from their product accounts and after the advisers ceased providing advice, as well as issuing account statements for an investor-directed portfolio service which appeared to show that adviser fees were no longer being charged. The wrongly charged fees were retained by Asgard as revenue.
It also alleges Asgard’s conduct contravened its overarching obligations as an AFS licence holder.
ASIC also commenced proceedings against BT for issuing account statements which appeared to show that adviser fees were no longer being charged while the “adviser fee” line item was removed from the account statement, with an amount equal to that fee added to the administration fee amount. The conduct was in relation to superannuation products for which BT is trustee.
The corporate regulator has also commenced civil penalty proceedings in the Federal Court against State Super Financial Services Australia Limited (StatePlus) over allegations that it charged at least 36,592 members fees for financial advice that StatePlus promised it would provide but did not provide.
ASIC also alleges that StatePlus issued defective disclosure documents or statements that included promises to provide annual financial advice to members in circumstances that StatePlus did not have reasonable grounds for believing it could provide.
“Today, ASIC has commenced a ‘fees for no service’ case against BT and Asgard as well as commencing a ‘fees for no service’ case against StatePlus Super,” said ASIC deputy chair Daniel Crennan QC. “Both cases, which relate to superannuation, were subject to case studies in the royal commission, were investigated by ASIC’s Office of Enforcement and have been brought by ASIC to the Federal Court for determination.”
Westpac has accepted the allegations and said that it doesn’t intend to defend the proceedings.
“BTFM (BT Funds Management) and ACML (Asgard Capital Management Limited) will make submissions on the appropriate penalty in due course,” Westpac said in a statement. “BTFM and ACML apologise that these errors occurred and will work with ASIC to resolve the proceedings as quickly as possible.”
