Super fund hit with penalties over advice breaches
The Federal Court has ordered an APRA-regulated fund and its licensee to pay penalties for failures surrounding the promotion of the super fund.
In a recent announcement, the Australian Securities and Investments Commission (ASIC) stated that MobiSuper Pty Limited (MobiSuper) and MobiSuper’s financial services licensee, ZIB Financial Pty Limited (ZIB), have been ordered by the Federal Court to pay combined penalties of $250,000 for failures surrounding the promotion of the MobiSuper Fund.
According to ASIC, MobiSuper customer service officers (CSOs) telephoned customers, including those who accepted the offer from MobiSuper of a search service to identify “lost” superannuation held in accounts operated by other superannuation providers or the ATO.
The Federal Court found that through these telephone calls, MobiSuper customer service officers provided personal advice without acting in the best interests of those consumers and failed to warn consumers that the advice provided was based on incomplete or inaccurate information.
The court also found that MobiSuper made misleading claims that consumers could save fees by opening an account with the MobiSuper Fund and consolidating or rolling over their superannuation into the account.
It also found that MobiSuper failed to provide any statements of advice to consumers as required by law.
MobiSuper’s licensee, ZIB, has been ordered to pay a penalty for failures by MobiSuper customer service officers and for ZIB’s failure to take reasonable steps to ensure that those failures did not occur.
The Federal Court also found that ZIB did not comply with its obligation to ensure that the financial services covered by its licence, as provided by MobiSuper, were provided efficiently, honestly and fairly.
In her decision, Justice Charlesworth found that ZIB’s “acts and omissions fall short of the ‘sound ethical values and judgment’ that are expected of a financial services licensee and constitutes a ‘serious departure from reasonable standards of performance of advice’.”
ASIC deputy chair Sarah Court explained that ASIC took on the case because of concerns that personal advice was being provided without the relevant legal protections, and consumers were being misled into moving their superannuation into the MobiSuper Fund.
“This practice was not focussed on what was best for the consumer. ASIC will continue to work to ensure licensees comply with the law and correctly monitor their corporate authorised representatives to prevent poor promotional behaviour,” said Ms Court.
“Superannuation is important for the future financial security of Australians. It is essential that consumers, when choosing their super fund, are not misled or given personal advice that is not in their best interests.”