The corporate watchdog has launched court action against Sargon-owned Tidswell Financial Services and the promoter of MobiSuper over breaches of best interests duty.
The regulator claims that Tidswell as the trustee of the MobiSuper fund as well as its promoter, MobiSuper Pty Limited and its AFS licensee ZIB Financial, promoted false and misleading statements about superannuation, insurance products and services.
Also named in the action is MobiSuper and ZIB financial director Andrew Richard Grover.
The legal action follows repeated warnings by both the corporate and prudential regulators that supervision and surveillance of superannuation trustees will increase and that trustees will be hit with civil penalties for failing to act in the best interests of members.
Tidswell partners with promoter companies to offer new super products. While Tidswell operates the super fund, the promotion and marketing of the fund is carried out by the promoter. In this case, Tidswell hired Mobi as promoter, which in turn contracted ZIB to provide financial services.
“ASIC is concerned about potential harm to consumers if professional superannuation trustees fail to adequately monitor the activities of their promoters,” the regulator said in a statement.
“Trustees have responsibilities in relation to the actions of their promoters,” the statement continued. “ASIC is concerned that Tidswell and ZIB failed to do all things necessary to ensure the financial services covered by their respective AFS licences were provided efficiently, honestly and fairly.”
The watchdog also alleges the general advice model used to promote the MobiSuper fund had insufficient regard for consumers’ best interests and this was not adequately monitored by Tidswell and ZIB.
Also, false and misleading statements were made about superannuation, insurance products and services, ASIC alleged in a statement.
According to the regulator, Mobi offered an obligation-free ‘lost super’ search to consumers through online campaigns with the main objective of getting them to join the fund and roll their other super balances into Mobi-promoted products.
Further, ASIC claims that during marketing telephone calls to consumers Mobi customer service staff made misleading claims about fee savings and equivalent insurance cover if consumers joined the fund. In doing so, ASIC said Mobi provided personal advice that was not in consumers’ best interests.
ASIC is pursuing civil penalties against Tidswell and ZIB for advice given to consumers in breach of best interest obligations. It is also seeking penalties against Mobi and Grover for the misleading advertising and Mobi for the false and misleading claims made during the marketing phone calls.
ASIC is also seeking various declarations – including those under the Corporations Act – that Tidswell and ZIB failed to fulfill their obligations as licensees and that Mobi engaged in misleading conduct which Grover knew about.
This action has been taken in collaboration with APRA.