IMF Bentham & William Roberts Lawyers announce a class action regarding the payment by the MLC Super Fund of conflicted remuneration to financial advisers using member’s funds
- Contact:
- Ewen McNee
- Senior Investment Manager | +61 2 8223 3515 | [email protected]
SYDNEY, 10 July 2019: Australia’s leading dispute financier IMF Bentham Limited (ASX:IMF) and William Roberts Lawyers announced today a class action seeking compensation for MLC Super Fund members against NAB-owned MLC Super Fund trustee company, NULIS Nominees (Australia) Limited, relating to excess fees charged to members of the MLC Super Fund from 1 July 2016.
The claim alleges NULIS breached its obligations to members of the MLC Super Fund, when it levied excess fees from members in order to pay commissions and other fees to (independent and bank-aligned) advisers. The over-charging was revealed during the recent Financial Services Royal Commission. In his final report, Commissioner Hayne concluded “the trustee may have breached its duty to act in the best interests of the affected members’”.
It is not proposed that any financial advisers be sued in the class action.
Bill Petrovski, Principal of William Roberts Lawyers, said: “On the available information, our understanding is that excess fees charged to MLC Super members likely exceeds A$100m. Superannuation trustees have an obligation to act in the best interest of their members. In charging fees to members in order to pay these adviser commissions, the class action will allege that the trustee fell short of this obligation”.
IMF Bentham Investment Manager Ewen McNee said: “Even small changes in fees can have a substantial impact on the retirement outcomes. IMF’s funding will facilitate an action claiming compensation on behalf of over 100,000 MLC Super Fund members”.
Background
From 1 July 2013, the Future of Financial Advice Reforms (FOFA Reforms) banned conflicted remuneration for financial advisors, being commissions and other payments that could reasonably influence the advice given to retail clients. Under the ‘grandfathering provisions’ of the FOFA Reforms, certain commissions or other payments made under an arrangement entered into prior to 1 July 2013 were excepted from the ban.
In mid-2016 MLC reorganised the superannuation fund structures operated by the MLC/NAB group, with NULIS becoming the trustee for the MLC Super Fund. Members were transferred to the MLC Super Fund (Transferred Members). NULIS, the new trustee, maintained the grandfathered payments being made to advisers from Transferred Members’ accounts prior to 1 July 2016. The class action alleges that this decision by NULIS to maintain payments to advisers constituted a breach of its duty to act in the best interest of members of the MLC Super Fund, as well as its duties to exercise reasonable care and to put the interests of members above its own interests and the interests of its related parties.
How do MLC Super members know if they are affected and what remedies are available?
Many members may not know if their accounts have been impacted by excess fees. IMF Bentham and William Roberts will help confirm whether members have been affected by such fees once members register (obligation-free) with William Roberts at www.williamroberts.com.au or IMF Bentham www.imf.com.au.
Bill Petrovski, Principal | +61 2 9552 2111 | [email protected]