Elkins named in CFS class action filing

Linda Elkins may have left Colonial First State and become at partner at KPMG but that has not stopped her being drawn into a class action mounted by plaintiff law firm, Maurice Blackburn.

The Commonwealth Bank late yesterday acknowledged to the Australian Securities Exchange that the class action proceedings had been filed by Maurice Blackburn in the Federal Court against Colonial First State Investments Limited (CFSIL) and a former executive director of CFSIL.

It said the class action related to the transfer of certain default balances held by members of FirstChoice Employer Super to a MySuper product.

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The bank said that both it and CFSIL were reviewing the claim and would provide any update as required.

Elkins was the executive director of CFSIL until earlier this year when she announced her move to KPMG.

Maurice Blackburn flagged the filing of the class action earlier this week and is alleging breaches of super trustee duties leading substantial losses by members of the fund.




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Great to finally see a bonus driven institutional executive being held to account. Elkins won't get much sympathy from the adviser community she tried to throw under the bus to save herself at the Royal Commission. Let's hope next time she appears in court she dishes the dirt on those executives above her that encouraged and coerced inappropriate behaviour.

I don't think Maurice Blackburn has done their homework properly.
Lets consider these facts...the important pieces of information on which a case should be based.
Colonial First State administered multiple and very detailed contacts via mail, email and online to members over a significant period of time allowing a long lead time prior to any proposed changes having to be enacted.
CFS clearly and diligently illustrated the advantages and disadvantages that may have affected members electing to transfer balances and clearly highlighted to members they had a choice to opt out of the transfer process if desired.
Firstly, the following needs to be clarified.
Many of the CFS FirstChoice Employer Super Members were part of a larger employer superannuation fund.
Many of these plans participate in fee discounts in the form of significant plan rebates based on the volume of monies held within the total account. (not just within the individual member account)
Individual members therefore benefit significantly in regard to reduced fees and costs because every year they are receiving fee rebates credited to their member account based on the overall volume of the total plan and relative to their own account balance.
As the account balance of the total plan increase with additional contributions and investment growth, the dollar figure rebate credited back to the members individual account also increases thereby assisting to further reduce the cost to the member every year.
These rebates can be significant.
But here is the important information that has not been highlighted.
If members were to elect to transfer their Accrued Default Amount to the MySuper Lifestage option, the plan discounts and fee rebates were not going to be available to these members.
In addition, many of these members who had strong plan adviser relationships had made strategic investment option decisions over many years in relation to asset allocation and diversification within their Accrued Default Account balances.
For these members electing to transfer their balances to the MySuper investment options, they were to be placed in a single Lifestage option with all their member balance to allocated to a generic, age-based option they had no real understanding of asset allocation or control over.
So, lets take a member with an account balance of $250,000 allocated across 5 strategic investment options based on investment risk profile etc and who has been a member of that super fund for 10 years.
This member has been receiving the plan volume based rebates for the full 10 years thereby significantly reducing the fees levied against their account every year.
If this member chose to transfer their balance to the MySuper option, they would have to forgo these plan fee rebates, have their whole existing account spread across 5 investment options transferred to a single, generic investment option and then be charged a buy/sell spread to sell down their current investment options in order to transfer to the new single option.
Then, once their account is placed in the new single investment option that receives no fee rebates and they then elected to diversify their account balance to replicate their previous investment allocation they would incur further Buy/Sell spread costs and potentially additional advice costs to ensure their strategy was suitable to their investment objectives.
So, for those members who read the significant volume of information provided by CFS well and truly prior to any decision having to be made by members and who made a decision to remain within the existing investment options based on the facts noted above, they most likely have made a decision based on their own best interests.
For those who elected to transfer balances or to move to the MySuper options, it is hoped they made those decisions based on analysis rather than than simply perception.
In relation to the claim that time frames were inadequate in regard to the transfer process, I believe it needs to be considered that if during the transfer time frame a member was in full receipt of plan fee rebates to their account and if the transfer time frame had been over a shorter time frame and they had foregone those rebates and been charged fees to transfer investment options, why does Maurice Blackburn believe members were disadvantaged other than for the purpose of their firm reaping millions and millions of dollars in fees from these very members.
Sadly, it appears to be a case of not letting the ground level facts get in the way of a good class action.
These legal firms always appear to be fighting the good fight for the so called "silent and vulnerable" and yet it is always the vulnerability of these people that serve as good targets by which these firms can generate a large financial gain.

Well said agent 86. Sounds like you were pretty close to the action.

Elkins and others like her need to be held to account. The incompetence on the RC stand was there for all to see and the CFS Distribution team led by Marianne Perkovic and subsequently Elkins were the subject of a leadership void and a negative bowing at all times and irrespective of staff impacts to the CBA Wealth executive (aka Annabel Spring) culture. If only the employees through that time could put together a class action...the rats have just about all left the sinking ship. Why would you do business with any of them? Or any of the GMs under them?

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