The Federal Court has ordered Mercer Financial Advice pay a $12 million penalty after being found to have failed in its fee disclosure obligations and charging fees to customers it was not entitled to charge.
In a media release on Thursday afternoon, ASIC said Mercer admitted to the misconduct.
Mercer was found to have breached sections of both the Corporations Act and ASIC Act over a three-year period from 1 July 2016 to 30 June 2019 when it:
- Failed to invite more than 800 clients to attend annual review meetings, despite those clients being entitled to attend the meetings;
- Failed to provide fee disclosure statements to over 500 clients;
- Issued over 3000 non-compliant fee disclosure statements to more than 2000 clients; and
- Charged 761 clients a combined total of more than $4.7 million in fees for services clients did not receive.
The court found that Mercer’s failures were caused by having inadequate systems and processes in place to ensure that its fee disclosure statements complied with financial services laws.
Mercer was also found to have breached its obligation to provide financial services efficiently, honestly and fairly.