The Federal Court has ordered BT Funds Management Limited to pay a $20 million fine for continuing to charge commissions to nearly 10,000 members of one of its superannuation funds seven years after they were banned.
A release from ASIC states the Court found BT Funds Management charged insurance premiums, that included commission payments, to members of Asgard Independence Plan Division Two from 2013 to 2020, despite these payments having been banned in 2013 under the Future of Financial Advice reforms.
In its release, the regulator noted Asgard fund members were also charged commissions via their premiums that were paid to financial advisers, even though members had opted out of the financial adviser component of their accounts.
…the misconduct was a result of systems and processing errors
In handing down judgment, Justice Jonathan Beach remarked that the misconduct was a result of systems and processing errors, and an inadequate risk management framework. Justice Beach further stated that the inappropriate deduction of amounts based on false or misleading conduct eroded the superannuation balances of affected members.
The Court also found BT Funds Management misrepresented to members in periodic statements that correct deductions had been made.
Westpac has indicated it will pay more than $9.8 million in remediation to affected members by July this year. Of six civil penalty proceedings against Westpac which were filed by ASIC in November last year, this is the first matter to receive judgement.
ASIC Deputy Chair Sarah Court said this misconduct was caused by the failure to implement proper systems to ensure consumers are correctly charged:
‘As the Court finalises these matters against Westpac, we urge Westpac, and other financial institutions, to look at their culture of compliance and invest in systems that mean incorrect charging of fees, premiums and commissions does not occur,’ concluded Ms Court.
