The Australian Securities and Investments Commission (ASIC) announces that it has received an order from the Federal Court imposing a $12 million fine on Mercer Financial Advice (Australia) Pty Ltd.
The company was found to have failed in its fee disclosure obligations and charged fees to customers it had no right to charge.
ASIC Deputy Chair Sarah Court said:
“These failures occurred in part because Mercer failed to maintain the necessary systems and procedures to ensure that disclosure statements sent to clients were timely and accurate.
ASIC expects businesses to invest properly in their compliance systems. As today’s result shows, if they don’t, they face significant penalties.’
Mercer was found to have breached sections of both the Companies Act and ASIC over a three-year period from 1 July 2016 to 30 June 2019 when:
- failed to invite more than 800 clients to attend the annual review meetings, despite the fact that those clients were entitled to attend the meetings;
- failed to provide fee disclosure statements to more than 500 clients;
- issued over 3000 non-compliant charge disclosure statements to over 2000 customers and
- charged 761 customers a total of more than $4.7 million in fees for services the customers did not receive.
The Court found that Mercer’s failures were due to inadequate systems and procedures to ensure that its remuneration disclosures complied with financial services legislation.
Mercer was also found to have breached its duty to provide financial services efficiently, honestly and fairly.
Judge McEvoy noted in his judgment that “the offenses in this case were extremely serious. They were large in number, affected many customers, involved large sums of money and continued over a long period of time.
Mercer admitted wrongdoing.