Super fund ordered to reimburse adviser commissions
A superannuation fund has been ordered to refund the commissions it paid to a financial adviser because the superannuation fund member complained that she had never received any financial advice.
As well, the Superannuation Complaints Tribunal (SCT) has warned that superannuation funds which describe a charge as an “administration fee” when the whole fee is paid as a commission to a financial adviser could be regarded as being misleading.
The SCT ordered repayment of the commission amounts to the member’s accounts after she complained that the superannuation fund was deducting amounts from her account when she had had no contact with the financial planner.
The SCT heard that when the superannuation fund member complained that she did not have an adviser, she was then given the name of an adviser and had queried why she had not been informed that she could have specified the removal of an adviser from her account and avoided a five per cent “administration fee”.
She said she wanted reimbursement for her losses that resulted from fees being paid to advisers who had not provided services to her. The SCT was told that the complainant’s adviser was replaced by another adviser in 2003 who had no contact with the complainant but received commissions on her contributions for which she should be compensated.
The matter was referred to the SCT after the superannuation fund refused to refund the fees.
The SCT not only set aside the decision of the superannuation fund, it directed that amounts of $7941.82 and $500 be repaid to her account along with the earnings lost from that money.
The SCT also invoked section 44 of its Act and directed the superannuation fund to inform all members of the fund of the Tribunal’s decision.
Recommended for you
A financial advice firm has seen a weekly decline of 10 advisers, with all moving to a new licensee, while Centrepoint Alliance continues its “growth story”.
Sequoia Financial Group has seen a top-level reshuffle as the chair of the board, John Larsen, steps down after five years in the position.
As statements of advice move into the rear-view mirror, Vital Business Partners explores how financial advisers are adopting innovative documentation strategies.
Adviser Ratings has explored whether there is a financial benefit to advice firms seeking to have a specialised client base in terms of client assets and fees charged.
