The Royal Commission has named Sunsuper and Mercer as being among two financial services entities who were being investigated but ultimately were not required to appear before its most recent hearings in Melbourne.
However, the Royal Commission was told that Mercer had acknowledged conduct that in some aspects may have fallen below community expectations.
Counsel assisting the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, Michael Hodge QC named Mercer and Sunsuper in his summing up, saying that investigations into Sunsuper had continued but it was ultimately concluded that “the issue that was raised there was of insufficient general application to warrant consideration orally”.
He said that with respect to Mercer, the issue ultimately did not go beyond something that had already been addressed publicly in a news report “and shortly before the commencement of the hearings we received a submission from Mercer acknowledging that the conduct or some aspects of the conduct may fall below community standards and expectations”.
Hodge used his summing up to suggest that the evidence suggested that superannuation fund trustees were not prioritising the interests of their members over the interests of others, including themselves and the groups of which they were parties.
“And there are certain types of decisions that seem to particularly raise matters of concern,” he said. “The decision to charge or allow others to charge members’ fees which are then paid to financial advisers in circumstances where the member doesn’t receive or could not have been receiving the services in respect of which the service was provided, and in some cases, they would also be not the financial adviser, him or herself, but rather some other company within the group that was supposed to be providing services.”
“Another decision of concern are decisions to charge or maintain grandfathered trailing commissions and other forms of conflicted remuneration. Another decision of concern is the decision to delay, or at the very least not expedite the transition of accrued default amounts to a MySuper product with, it would seem, one apparent effect being to entrench members for a longer period of time in legacy products with trailing commissions.”
Hodge said a fourth decision was the potential failure to become aware and intervene to prevent the charging of fees by a related party where those fees resulted in negative returns to members.