Breaches and alleged breaches around fees for no service has seen ASIC ban two NSW company officers for six years and, separately, commence civil penalty proceedings in the Federal Court against six companies that are, or were, part of the AMP Limited group.
ASIC bans Timothy Parry and Damian Price of North Coast Financial Services
A statement from ASIC says it has banned Timothy William Parry and Damian Garnet Price of Lismore-based North Coast Financial Services from controlling a financial services business or performing any function as an officer of an entity that carries on a financial services business for six years, after finding they breached their duties.
The commission states that it found that Parry and Price breached their duties as director and officer respectively by failing to take sufficient steps to ensure that:
- They fulfilled their responsibilities by implementing effective supervision and monitoring arrangements at NCFS
- A satisfactory due diligence process was undertaken when purchasing NCFS’s client book
- NCFS complied with financial services laws
- NCFS and its representatives complied with the compliance manual of its licensee, Millennium 3 Financial Services, performed the obligations in Millennium 3’s compliance manual in a diligent and faithful manner, and complied with obligations under the law.
ASIC says that NCFS has been an authorised representative of Millennium 3 since 5 February 2004 and is authorised to provide financial product advice and deal in financial products.
It says Parry was sole director and secretary of NCFS between 4 September 2008 and 15 October 2020. Price was an officer of NCFS at all relevant times. While they controlled the business, neither of them were financial advisers at NCFS.
The commission says that on or around 28 May 2015, NCFS took on board new clients. ASIC found neither Parry nor Price took sufficient steps to identify the services NCFS was required to provide to these new clients, resulting in 58 clients being charged over $1500 each in fees for services that were not provided.
It says that Price and Parry each have the right to appeal to the Administrative Appeals Tribunal for a review of ASIC’s decisions.
As background ASIC says that it commenced an investigation into Price and Parry following a breach report lodged by Millennium 3 concerning fees for no service conduct by NCFS.
ASIC sues AMP companies for fees for no service charged on corporate superannuation accounts
Separately, another statement from ASIC says it 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.
The statement says that 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 more than $600,000 in advice fees from affected customer accounts.
ASIC states it 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
- Contravened their obligations as Australian financial services licensees to act efficiently, honestly and fairly
ASIC states that it 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
- Hillross Financial Services Limited
The regulator says 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 (see: ASIC Sues AMP for Charging Deceased Customers).
It says that 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.
