21-191MR ASIC sues AMP companies for fees for no service charged on corporate superannuation accounts

ASIC has commenced civil penalty proceedings in the Federal Court against six companies that are, or were, part of the AMP Limited group, alleging these entities charged fees for no service on corporate superannuation accounts.

ASIC alleges the AMP companies charged advice fees to more than 1,500 customers despite being notified that those customers were no longer able to access the relevant advice. ASIC alleges AMP received over $600,000 in advice fees from affected customer accounts.

ASIC further alleges that from July 2015 to April 2019, the AMP companies:

deducted financial advice fees from 1,540 customers’ superannuation accounts despite being aware that the customer had left their employer-sponsored superannuation account and therefore could not access the advice for which those fees were paid;
failed to ensure that a system was in place that did not charge customers who had left their employer-sponsored account; and
contravened their obligations as Australian financial services licensees to act efficiently, honestly and fairly.
ASIC is seeking declarations, pecuniary penalties and adverse publicity orders to be made by the Federal Court.

The six AMP companies are:

AMP Superannuation Limited;
AMP Life Limited, which is now part of the Resolution Life Group but was part of AMP when the conduct occurred;
AMP Financial Planning Proprietary Limited;
AMP Services Limited;
Charter Financial Planning Limited; and
Hillross Financial Services Limited.
This action follows proceedings commenced by ASIC against a number of AMP companies alleging that they had charged life insurance premiums and advice fees to more than 2,000 customers despite being notified of their death (21-115MR).

AMP Superannuation Limited is the trustee of two superannuation funds: the AMP Superannuation Savings Trust and the AMP Retirement Trust.

The proceeding will be listed for a case management hearing on a date yet to be set.

The ASIC/APRA-regulated superannuation industry, worth over $2.1 trillion, is a vital part of Australia’s financial system. ASIC commenced this proceeding because under the law, superannuation trustees must provide services efficiently, honestly and fairly. This involves ensuring their existing governance and assurance arrangements for fees charged to members’ superannuation accounts are robust and their members are charged fairly.

On 30 June 2021, ASIC and APRA jointly provided additional information to superannuation trustees to improve their oversight of advice fee deductions from member accounts. This follows earlier joint communications to reinforce the importance of trustees having in place strong governance, risk management and oversight processes to ensure that only authorised and appropriate fees and other charges are deducted from members’ superannuation accounts.

ASIC continues to prioritise enforcement investigations and remediation for consumers arising out of fees for no service conduct, which, as at 31 December 2020, had seen some of Australia’s largest banking and financial services institutions pay, or offer to pay, $1.04 billion in compensation. AMP has paid over $153.7 million to over 200,000 customers as of that date (21-023MR).

Throughout 2019, AMP conducted a full remediation program covering all affected superannuation accounts in which more than $900,000 was repaid to affected customers for wrongfully charging advice fees to over 2,500 superannuation accounts.

Editor’s note 1:

The matter is listed for a case management hearing on 15 September 2021.

Editor’s note 2:

On 15 September 2021, the matter was adjourned until 28 October 2021.

Editor’s note 3:

The matters is listed for a case management hearing on 8 December 2021.

Editor’s note 4:

The case management hearing on 8 December 2021 has been vacated. The next case management hearing has been listed on 10 March 2022.

Editor’s note 5:

At a case management conference on 10 March 2022, Justice Moshinsky listed the matter for a final hearing on 29 August 2022.

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