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Agreed Statements of Admission: ASIC, NULIS, MLC

November 4, 2019

 

 

Earlier this week, ASIC commenced proceedings against NAB’s wealth management division, NULIS Nominees, and MLC Nominees, as a result of allegations the companies charged fees for no services provided.

 

In a statement from the regulator, ASIC highlighted a list of agreed-upon facts and statements of admission made by MLC and NULIS while also alleging that the NAB wealth management companies ‘misled’ members about MLC’s Master Key products.

 

In a formal statement made by the corporate regulator in September last year:

 

ASIC also alleges NULIS and MLC Nominees deducted approximately $33m Plan Service Fees from 220,000 members of MLC MasterKey Business and MLC MasterKey Personal Super who did not have Plan Adviser (No-Adviser Members).  NAB also deducted approximately $67m Plan Service Fees from 300,000 members of MLC MasterKey Personal Super where Plan Advisers were not required to provide services and members did not receive services.

 

Around the same time, a representative of the NULIS group was unable to answer critical questions asked during the Royal Commission as to why the fees-for-no-service took place under his watch.

 

Paul Carter from NULIS said that the ‘commissions’ that were being charged were for specific advice; however, the payments were for access to general advice.

 

When the question was put to Carter as to why he though NULIS financial advisers would do this, he said that, not being a financial adviser, he was unable to answer the question.

 

 List of allegations can be found in ASIC’s 2018 public statement. That the companies:

  • contravened s912A(1)(a) of the Corporations Act 2001 (Corporations Act) by failing to ensure that its financial services were provided efficiently, honestly and fairly when it deducted approximately $33m Plan Service Fees from 220,000 No-Adviser Members;

  • made false or misleading representations to No-Adviser Members in contravention of ss 12DB, 12DA of the Australian Securities and Investments Commission Act 2001 (ASIC Act) and s1041H of the Corporations Act by representing that it was entitled to deduct the Plan Service Fee and the No-Adviser Member was obliged to pay it when there was no such obligation;

  • contravened s912A(1)(a) of the Corporations Act when deducting approximately $67.1m Plan Service Fees from 300,000 members of MLC MasterKey Personal Super (Linked Members) in circumstances where it did not oblige Plan Advisers to provide services and members did not receive services;

  • made false or misleading representations in contravention of s12DB and s12DA of the ASIC Act by not disclosing that Linked Members in MLC Masterkey Personal Super had the right to turn off the Plan Service Fee; and

  • contravened s912A(1)(c) of the Corporations Act by failing to comply with financial services laws, including issuing defective disclosure documents within the meaning of s1022A of the Corporations Act and failing to exercise the degree of skill, care and diligence as a prudent trustee would exercise and failing to act in the best interests of members in breach of its general law duties and the Superannuation Industry (Supervision) Act 1993 when making the fee deductions and alleged misrepresentations to members.

 

Provision has been made for the parties involved to submit further evidence. The hearing will take place in February 2020.

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