{"id":46832,"date":"2019-10-18T18:21:04","date_gmt":"2019-10-18T08:21:04","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=46832"},"modified":"2019-10-22T13:17:36","modified_gmt":"2019-10-22T03:17:36","slug":"second-colonial-first-state-class-action","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2019\/10\/18\/second-colonial-first-state-class-action\/","title":{"rendered":"Second Colonial First State Class Action"},"content":{"rendered":"

Slater and Gordon<\/a> has announced it has filed a class action on behalf of 500,000 Australians who were charged excessive superannuation fees to fund ongoing commissions paid by Colonial First State to financial advisers.<\/span><\/p>\n

<\/p>\n

\"\"<\/a>
Slater and Gordon Special Counsel, Nathan Rapoport …second class action against Colonial First State<\/figcaption><\/figure>\n

The law firm confirmed this is the fourth class action launched as part of its Get Your Super Back campaign, and the second against Colonial First State, a subsidiary of Commonwealth Bank.<\/span><\/p>\n

In its release, the firm stated: <\/span><\/p>\n

The class action alleges that since 2013 Colonial failed to act in the best interests of its members and acted unconscionably by charging them higher fees to pay for ongoing commissions to financial advisers who were not required to provide any ongoing services to members. The class action relates to members of the FirstChoice Super fund.<\/span><\/em><\/p>\n

The Banking Royal Commission revealed that since 2013, Colonial paid financial advisers or the licensees they worked for over $400 million in commissions that were funded by charging higher fees to superannuation members. Many of the advisers worked for the Commonwealth Bank group which made significant profits from retaining these commissions.<\/span><\/em><\/p>\n

Slater and Gordon Special Counsel, Nathan Rapoport<\/strong>, commented that in 2013 the Australian Government banned commissions to financial advisers for new members because it was clear they were not in members\u2019 best interests, through its Future of Financial Advice reforms.<\/span><\/p>\n

\u201cEver since, Colonial continued to pay commissions with respect to existing members under what became known as the \u2018grandfathering exception\u2019, and because of this it continued charging those members higher fees,\u201d Rapoport said.<\/span><\/p>\n

He said the firm agrees with what the Hayne Report found – that there was no justification for continuing to pay commissions to financial advisers. <\/span><\/p>\n

\u201cPaying these commissions \u2013 and as a result charging members higher fees \u2013 ripped hundreds of millions of dollars out of members\u2019 retirement savings to profit the financial advisers or the licensees they worked for who were not required to provide any services in exchange,\u201d Rapoport explained.<\/span><\/p>\n

“…ripped hundreds of millions of dollars out of members\u2019 retirement savings to profit the financial advisers.”<\/span><\/h6>\n

\u201cWe allege that Colonial should have stopped paying the commissions for all its members and reduced their fees accordingly, as it properly did for new members.\u201d<\/span><\/p>\n

He added: \u201cAt the Royal Commission Colonial accepted that some of its conduct fell below community standards and expectations. This is an understatement. We believe Colonial\u2019s conduct was in breach of the law and it should be held to account and required to compensate its members.\u201d<\/span><\/p>\n

Rapoport noted that Colonial had the power to transfer existing FirstChoice Super members into identical products with lower fees and where commissions were not paid.<\/span><\/p>\n

\u201cRather than use this power for the benefit of its members, Colonial kept them in the more expensive products, preying on their passivity so it could continue to charge them higher fees to fund the commissions,\u201d he said.<\/span><\/p>\n

The class action is being funded by litigation funder, Augusta Ventures.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Slater and Gordon has announced it has filed a class action on behalf of 500,000 Australians who were charged excessive superannuation fees to fund ongoing commissions paid by Colonial First State to financial advisers.<\/p>\n","protected":false},"author":20,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[48,8,270],"tags":[],"class_list":{"0":"post-46832","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-company-news","7":"category-compliance-regulation","8":"category-remuneration"},"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/46832","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/users\/20"}],"replies":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/comments?post=46832"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/46832\/revisions"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=46832"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=46832"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=46832"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}