The corporate regulator is suing Mercer Financial Advice for misleading customers and failing to provide fee disclosure statements.
ASIC claims between July 2016 and June 2019 Mercer made false or misleading representations on more than 5,500 occasions by claiming it provided required services when it had not.
Mercer failed to provide review meetings to its customers who paid fees they were not obliged to pay.
ASIC alleged Mercer failed to provide fee disclosure statements or provided inaccurate statements to more than 2,100 customers and failed “to do all things necessary” to ensure the financial services covered by its licence was provided efficiently, honestly and fairly.
Mercer has already completed a remediation program for more than 3,400 customers who were charged fees for financial advice that may not have been provided between January 2012 to June 2019, which has resulted in compensation of approximately $45 million.
Going after the top dogs
ASIC deputy chair Sarah Court said the proceedings are another example of large financial institutions charging fees to customers that it was allegedly not entitled to charge.
“Additionally, Mercer’s poor compliance systems led to allegedly misleading disclosure statements, which affect how customers make decisions about the financial services they are paying for,” she said in a media release.
Since the start of the year $2.9 billion has been paid by six major financial services institutions for fees for no service which included all big four banks, Macquarie and AMP.
ASIC took action against NAB for fees for no service and disclosure statements which led to the Federal Court fine of $18.5 million.
In April, Westpac was fine $40 million for charging advice fees to over 11,800 deceased customers.
A couple of months earlier in February the corporate regulator handed out a $20 million penalty to Aware Financial Services, the advice arm of Aware Super, for charging 25,300 customers a combined $50 million for advice services it didn’t provide.
On 15 December, 2021 civil penalty proceedings commenced in the Federal Court against superannuation trustee OnePath Custodians incorrectly charging over $4 million in fees to 18,000 fund members when it was not entitled to.
In July 2021 it sued AMP for allegedly charged fees-for-no-service on corporate superannuation accounts to 1,540 clients between 2015 and 2019. It was alleged six entities charged fees despite being notified that customers had left their corporate superannuation account and were no longer able to access advice.