The Federal Court ruled that Mercer breached sections of the Corporations Act and ASIC Act from July 1, 2016, to June 30, 2019, when it:
The Federal Court also ruled that Mercer breached its obligation to provide financial services efficiently, honestly, and fairly.
Justice McEvoy said Mercer’s inadequate systems and processes failed to ensure the company’s fee disclosure statements complied with financial services laws.
“The community is entitled to expect that robust systems and processes will be put in place and maintained in the market for financial services to ensure that conduct of the kind which has occurred in this case does not occur,” he said.
Mercer admitted to the misconduct.
Commenting on Mercer’s penalty, Australian Securities & Investments Commission (ASIC) deputy chair Sarah Court agreed with Justice McEvoy’s decision that the contraventions in the case were severe because they affected many clients, involved large sums, and continued over a long period.
“This is a significant penalty for a financial advice provider. Mercer failed in its obligation to provide fee disclosure statements to clients, provided misleading information in the disclosure statements it did provide, and charged its clients fees for services it was not entitled to charge,” Court said. “These failures occurred in part because Mercer failed to maintain the necessary systems and processes to ensure that the disclosure statements sent to customers were timely and accurate.
“ASIC expects businesses to invest properly in their compliance systems. As [the] outcome shows, if they fail to do so, they face significant penalties.”
In other news, the ASIC outlined its enforcement priorities for 2024 to “create a culture of compliance across Australia’s financial system and the corporate sector.”
