The Federal Court has today found that Diversa Trustees Limited (Diversa), a superannuation trustee, did not fail to act efficiently, honestly and fairly or fail to take reasonable steps to ensure its representatives complied with financial services laws.
ASIC had alleged that Diversa contravened the law by allowing Australian Super Finder, the Australian Dealer Group, and financial adviser Mr Nizi Bhandari, to sign consumers up to its YourChoice Super product between 13 March 2019 and 18 December 2020.
ASIC alleged Diversa and the OneVue Group (which provided many day-to-day functions for the YourChoice Super fund) knew or should have known that the Australian Super Finder business was engaging in concerning behaviour and was at risk of breaking the law. ASIC alleged that the OneVue Group paid approximately $7.5 million in commissions on behalf of Diversa.
ASIC Deputy Chair Sarah Court said, ‘ASIC pursued this case as part of our focus on trustee oversight of advice, which, if not done properly, can enable inappropriate behaviour by service providers and others. ASIC will continue to work with superannuation trustees emphasising the importance of risk management when dealing with third-party providers and others.’
ASIC is carefully reviewing the judgment.
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Background
Australian Dealer Group (ADG) operated a website called ‘Australian Super Finder’ through which a consumer could request a search for lost superannuation. ADG offered to consolidate a consumer’s ‘found’ superannuation into a single fund.
Mr Bhandari was permanently banned by ASIC from providing financial services and engaging in credit activities in March 2021. ASIC found he had acted dishonestly while assisting consumers to find and consolidate their superannuation and obtain hardship payments. ASIC found that, because of ADG and Mr Bhandari’s conduct, consumers paid financial advice fees and were potentially exposed to harm, including loss of insurance held through superannuation, extra fees and ATO penalties.
ASIC also cancelled ADG’s Australian financial services licence (21-046MR).
Mr Bhandari also faces criminal charges in the Magistrates’ Court of Victoria (22-178MR).
ASIC and APRA have previously provided guidance for trustees on appropriate oversight practices in relation to advice fee payments from member accounts in June 2021 and April 2019.
ASIC’s Moneysmart website provides people with free tools, tips and guidance to help them make informed decisions about money. Find out more about finding lost super and tips for choosing a super fund.