ASIC has started court action around the promotion of a super fund, including allegations of misleading claims about fees and insurance.
ASIC announced that it has started court action, in the Federal Court of South Australia, against a super fund trustee, the promoter and others.
“ASIC is concerned about potential harm to consumers if professional superannuation trustees fail to adequately monitor the activities of their promoters. Trustees have responsibilities in relation to the actions of their promoters,” said ASIC.
The action surrounds the promotion of the MobiSuper Fund. Under an agreement between Tidswell Master Superannuation Plan and MobiSuper Pty Limited, Tidswell started the MobiSuper Fund as a division of the Tidswell fund, with Mobi Pty Ltd being the promoter of the new fund.
ASIC is “concerned” that Tidswell and ZIB Financial Pty Limited (the financial services licensee of Mobi) “failed to do all things necessary to ensure the financial services covered by their respective AFS licences were provided efficiently, honestly and fairly”.
“ASIC also alleges that both Tidswell and ZIB failed to adequately monitor Mobi’s promotion of the Fund through a purported ‘general advice model’ that had insufficient regard for consumers’ best interests.”
ASIC alleges that Mobi offered a lost super search to consumers online, with the “primary objective to get consumers to join the Fund and roll their other super balances into Mobi-promoted products”.
It is also alleged that in phone calls to consumers, Mobi made “misleading claims about fee savings and equivalent insurance cover if consumers joined the Fund and provided personal advice that was not in consumers’ best interests”.
ASIC is seeking a number of civil penalties and “various” declarations from the court.
The court action was taken after ASIC consulted with APRA – which is responsible for regulating Tidswell under the SIS Act.
“ASIC and APRA work together to ensure that superannuation trustees such as Tidswell meet both their prudential and conduct obligations. ASIC and APRA support innovation in superannuation and acknowledge the place of professional trustees in bringing new and innovative products to the market, provided this is done in a way that prioritises the best interests of members,” said ASIC.
“APRA shares ASIC’s concerns and has engaged with ASIC during the investigation. ASIC will continue to consult with APRA in relation to the proceedings following the delegation of APRA’s powers. APRA fully supports ASIC in respect of action it takes to hold professional trustees to account for any potential harm to consumers caused by the conduct of their outsourced service providers.”