ASIC's Daniel Crennan

The federal court of Australia has order NAB’s trustees MLC Nominees and Nulis Nominees to pay a total of $57.5 million penalty after being found guilty of what ASIC chair Daniel Crennan describes as “very serious contraventions relating to charging members fees for no service.

Between September 2012 and June 2016 MLC Nominees deducted around $33.6 million in “Plan Service Fees” from approximately 220,000 members of MasterKey Business Super and MasterKey Personal Super (MKPS), without providing a plan adviser, ASIC stated.

Between September 2012 and June 2016 MLC Nominees and Nulis Nominees deducted around $71.9 million in planning service fees from approximately 457,000 members of Masterkey Personal Super, without providing access to a plan adviser.

MLC will pay the lion’s share of the fine, $49.5 million, while Nulis will pay $8 million.

In delivering his verdict, Justice Yates also said the contraventions were “very serious”, and noted that the size of the penalty should consider the large scale of the businesses involved.

ASIC’s Crennan noted that the fines were the largest total penalty ever imposed by the corporate regulator in a civil penalty.

“Fees for no service conduct is particularly egregious, having resulted in substantial financial loss for thousands of unsuspecting consumers,” Crennan stated. “This demonstrates our resolve to deliver on the public’s expectation that we hold wrongdoers of all dimensions to account.”

The proceedings were commenced before the publication of the Hayne Royal Commission final report, but the NULIS proceedings formed a case study for the commission. This was the first enforcement action ASIC undertook for fee-for-no-service activity.

MLC Wealth – including its superannuation businesses – was purchased by IOOF for $1.44 two weeks ago, with remediation expenses remaining at the feet of MLC.

Tahn Sharpe is a Sydney-based financial services journalist with a background in financial planning. He writes on advice, superannuation, investment, banking and insurance issues, is a certified SMSF Adviser and holds an Advanced Diploma of Financial Planning. Contact at [email protected]
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