[PDF] NOTICE OF FILING 20 août 2020 1575.

View - Download NOTICE OF FILING

Previous PDF

Next PDF

NOTICE OF FILING

This document was lodged electronically in the FEDERAL COURT OF AUSTRALIA (FCA) on

20/08/2020 9:58:17 AM AEST and has

filing follow and important additional information about these are set out below.

Details of Filing

Document Lodged: Concise Statement

File Number: VID551/2020

File Title: AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION v

STATE SUPER FINANCIAL SERVICES AUSTRALIA LIMITED

Registry: VICTORIA REGISTRY - FEDERAL COURT OF AUSTRALIA

Dated:

20/08/2020 11:31:26 AM AEST Reg istrar

Important Information

s Rules, this Notice has been inserted as the first page of the document which

has been accepted for electronic filing. It is now taken to be part of that document for the purposes of

the proceeding in the Court and contains important information for all parties to that proceeding. It

must be included in the document served on each of those parties. The date and time of lodgment also shown above are the date and time that the document was received of the document is the day it was lodged (if

that is a business day for the Registry which accepts it and the document was received by 4.30 pm local

time at that Registry) or otherwise the next working day for that Registry.

Filed on behalf of (name & role of party)Australian Securities and Investments Commission, the PlaintiffPrepared by (name of person/lawyer)Tom Jarvis, lawyer for the PlaintiffLaw firm

(if applicable)Johnson Winter & SlatteryTel +613 8611 1336Fax+613 8611 1300Emailtom.jarvis@jws.com.au

Address for service

(include

state and postcode)c/- Johnson Winter & Slattery, level 34, 55 Collins St, Melbourne, VIC 300077779110v6Form NCF1

Concise Statement

No. of 2020

Federal Court of Australia

District Registry: Victoria

Division: General

AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

Plaintiff

STATE SUPER FINANCIAL SERVICES AUSTRALIA LIMITED (ACN 003 742 756)

Defendant

A. INTRODUCTION

1. At all relevant times, State Super Financial Services Australia Limited (ACN 003 742 756)

StatePlus

) was the trustee and registrable superannuation entity (RSE) licensee in respect of the StatePlus Retirement Fund (R1055535, Fund ABN 86664654341) and the StatePlus Fixed Term Pension Plan (R1055542, Fund ABN 57583186748). Collectively, those funds had not less than

63,000 member accounts and $11.4bn of funds under management in the Relevant Period (defined

below).

2. This

claim relates to StatePlus charging fees for financial planning advice services between 1 April

2013 and 30 June 2018 (the Relevant Period), in circumstances where:

a. in one or more annual periods ending during the Relevant Period, StatePlus failed to provide annual financial planning reviews through StatePlus financial planners (

Annual Review

Services

) to thousands of clients ("fees for no service conduct" or FFNS Conduct), despite those clients having either: i. received written disclosure from StatePlus on or after 1 April 2013 that clients would be provided with an Annual Review Service; and/or ii. entered into an ongoing advice service arrangement that included provision of an

Annual Review Service,

(clients in (i) or (ii), Advice Clients); and b. StatePlus failed to establish and maintain appropriate internal procedures, measures and controls and operational and compliance systems to ensure that, as far as reasonably practicable, it provided or would be able to provide Annual Review Services to all Advice

Clients.

3. Consequently, as set out in further detail below, ASIC contends that:

a. StatePlus' systems and controls were defective and not reasonably adequate to prevent the FFNS Conduct during the Relevant Period, causing StatePlus to contravene ss 912A(1)(a), (b) and (c) of the Corporations Act; b. StatePlus made misleading or deceptive representations as to the future provision of Annual Review Services in disclosure documents or statements that it gave to thousands of Advice Clients during the Relevant Period, and such disclosure documents or statements were 'defective' as defined in s 953A(1) of the Corporations Act; and

277779110c.between 21 August 2014 and 30 June 2018 (the Penalty Period), StatePlus, in contravention

of s 12DI(3) of the ASIC Act, accepted monthly payment for financial services in respect of

Advice

Clients when there were reasonable grounds for believing that it would not be able to supply those financial services to some or all of those Advice Clients within an applicable annual period.

B.IMPORTANT FACTS GIVING RISE TO THE CLAIMSStatePlus' business, its superannuation products and the charging of fees for advice services4.Throughout the Relevant Period, StatePlus operated a for-profit integrated financial planning and

funds management business, earning substantially all of its revenue through fees directly or indirectly charged to members of registrable superannuation entities and managed investment schemes of which it was the trustee. StatePlus provided financial services, including personal advice (within the meaning of s 766B(3) of the Corporations Act), to such members (or prospective members) under Australian Financial Services Licence 238430 (AFSL) through employed financial planners

located in offices across Australia. 5.Prior to around 1 April 2013, StatePlus only issued superannuation products in the StatePlus

Retirement

Fund or Fixed Term Pension Plan, known internally as 'bundled products', where clients holding those products paid a single, non-negotiable investment fee to StatePlus. This fee was calculated by reference to client funds under StatePlus management and was for investment management, administration and advice services. This was described from time to time by

StatePlus

as its 'one fee approach'. Around the time the FOFA reforms came into effect,1 StatePlus ceased issuing bundled products to new clients, however, clients who already held a bundled product

(Bundled Clients) could remain in it post 1 July 2013. 6.From around 1 April 2013, StatePlus only issued 'unbundled' superannuation products in the

StatePlus

Retirement Fund. Members holding those products paid a single, non-negotiable fee for investment management and administration, but, in contrast to 'bundled products', to receive personal advice, were required to either enter into an ongoing advice services agreement (those clients, Unbundled Advice Clients) or a one-off advice agreement with StatePlus, and pay a separate

advice fee. 7.During the Relevant Period, the single investment fee paid by Bundled Clients varied between

around

0.99% per annum and 1.5% per annum of the amount invested (depending on the

investment options chosen), and StatePlus, in half-yearly or annual statement communications with

Bundled

Clients in the StatePlus Retirement Fund, allocated 0.75% per annum to the notional cost of advice services. The advice fee payable by Unbundled Advice Clients was 0.75% per annum of the amount invested. StatePlus accepted payment of the applicable fees in respect of all Bundled

Clients

and Unbundled Advice Clients monthly throughout the Relevant Period. Disclosures and failure to provide Annual Review Services Advice Clients - Bundled Clients8.On and from at least 1 April 2013, StatePlus represented to Bundled Clients that the advice services

for which the single investment fee was paid included the provision of an Annual Review Service (the Annual Review Representation). An Annual Review Representation was made in, for example,

statements of advice or records of advice of the kind set out in Annexure A. 9.At least one Annual Review Representation was made to approximately 40,000 Bundled Clients

during the Relevant Period. StatePlus also expressly or impliedly conveyed that a financial planner would

be in contact to organise the Annual Review Service (Contact Representation).10.An Annual Review Service constituted financial services by StatePlus within the meaning of s

12BAB(1)(a)

and/or (g) of the ASIC Act and s 766A(1)(a) of the Corporations Act. 11.On 12 May 2017, StatePlus lodged a breach report with ASIC under s 912D of the Corporations

Act relating to the failure to provide an Annual Review Service to Bundled Clients since July 2013 (later

1 April 2013).

1 The Future of Financial Advice (FOFA) reforms came into effect on 1 July 2013.

37777911012.From around early 2018, StatePlus conducted an internal review of all Bundled Client files -

approximately

46,000 in total - in order to determine, in respect of each such Bundled Client,

whether an Annual Review Representation had been made since 1 April 2013 and whether, in each annual period after the making of an Annual Review Representation, up to the time of the internal review, an Annual Review Service had been provided to or expressly declined by the Bundled

Client.

13.This internal review found that approximately 27,500 Bundled Clients who received an Annual

Review

Representation had not received at least 1 Annual Review Service in an annual period thereafter (not having declined such review), as follows (remediation payments paid by StatePlus to

those clients in brackets):a.18,762 Bundled Clients did not receive 1 Annual Review Service ($46.2m);b.6,193 Bundled Clients did not receive 2 Annual Review Services ($23.3m);c.1,976 Bundled Clients did not receive 3 Annual Review Services ($7.8m);d.575 Bundled Clients did not receive 4 Annual Review Services ($2.2m); ande.61 Bundled Clients did not receive 5 Annual Review Services ($204,000).14.In addition, after October 2018, StatePlus re-assessed approximately 45,000 files the subject of

previous internal review, for then current Bundled Clients, for the period between the end date of their previous internal review and 31 August 2018. 1,187 Bundled Clients were assessed as not having received an Annual Review Service in a single annual period ending by no later than 31

August

2018. 15.Annexure B sets out (1) the date on or after 1 April 2013 that StatePlus made the Annual Review

Representation

for the first time to a Bundled Client who subsequently did not receive an Annual

Review

Service, or did not positively decline one, in at least one annual period thereafter (Affected

Bundled

Client); (2) the client ID of that Affected Bundled Client; and (3) the cumulative fees for advice remediated to that Affected Bundled Client in respect of non-receipt of Annual Review

Services.Advice Clients - Unbundled Advice Clients16.From around 1 April 2013, StatePlus entered into ongoing advice service arrangements with

Unbundled

Advice Clients under which the clients paid a separate advice fee for services including the

provision of an Annual Review, unless the client positively declined an Annual Review Service. 17.On 23 August 2018, StatePlus lodged a breach report with ASIC under s 912D of the Corporations

Act relating to the failure to provide Annual Review Services to Unbundled Advice Clients from April 2013.

18.On and from around November 2018, StatePlus conducted an internal review of Unbundled Advice

Client

files - approximately 17,000 - to determine, in respect of each such Unbundled Advice Client, whether, up to the time of the internal review, an Annual Review Service had been provided to or expressly declined by the Unbundled Advice Client in each annual period after becoming an

Unbundled

Advice Client. 19.This review found that approximately 9,000 Unbundled Advice Clients had not received at least 1

Annual

Review Service (not having declined such review) in annual periods after becoming an

Unbundled

Advice Client, as follows (remediation payments paid by StatePlus to those clients in

brackets):a.6,893 Unbundled Advice Clients did not receive 1 Annual Review Service, ($16.1m);b.1,681 Unbundled Advice Clients did not receive 2 Annual Review Services ($6.0m);c.361 Unbundled Advice Clients did not receive 3 Annual Review Services ($1.4m);d.71 Unbundled Advice Clients did not receive 4 Annual Review Services ($366,000); ande.19 Unbundled Advice Clients did not receive 5 Annual Review Services ($69,000).

47777911020.Annexure C sets out (1) when each Unbundled Advice Client who did not receive an Annual Review

Service,

and did not positively decline one, in at least one annual period thereafter became an

Unbundled

Advice Client; (2) that Unbundled Advice Client's Client ID; and (3) the cumulative fees for advice paid by that Unbundled Advice Client and remediated by StatePlus to or in respect of that client for those periods.

StatePlus'

systems and controls21.Notwithstanding that, on and from at least 1 April 2013, StatePlus represented provision of, or was

otherwise obligated to provide, Annual Review Services to a substantial number of Advice Clients, without

reference to the funds under management of those clients, StatePlus:a.before around 1 July 2017, applied a 14 month, not annual, cycle to Annual Review Services;b.before 1 July 2017, did not require, or otherwise have appropriate internal procedures in place

to ensure, that all Bundled Clients who received one or more Annual Review Representations were

subsequently invited to receive an Annual Review Service; c.prior to December 2017, did not effectively record and keep data of the anniversary date by

which

an Advice Client would be entitled to have received the next Annual Review Service;d.had service standards that: i.did not, before 1 July 2017, require planners to invite all Bundled Clients allocated to them

to

whom an Annual Review Representation had been made to an Annual Review Service;ii.did not, before 1 July 2016, require Bundled Clients with superannuation account

balances of less than $50,000 to be invited to receive, or receive, an Annual Review Service;iii.did not, between 1 July 2016 and 30 June 2017, require any Bundled Client with a superannuation account balance of less than $150,000 to be invited to receive, or receive, an

Annual Review Service;iv.before 1 July 2017, only required financial planners to ensure 85% of Bundled Clients

with superannuation account balances greater than $150,000 (prior to 1 July 2015, $250,000)

received an Annual Review Service, and then only within a 14 month period;v.did not, before 1 July 2018, require all Bundled Clients, to whom an Annual Review

Representation

had been made, to have received an Annual Review Service, or have declined

one, in an annual period; e.maintained a financial incentive scheme that, before 1 July 2018, contained new advice

revenue targets that had to be met in order for a planner to be eligible for an incentive, thereby incentivising

planners to prioritise prospective clients instead of Annual Review Services;f.had ineffective, poorly designed and in some cases undocumented operational practices to

ensure that Advice Clients remained allocated to a StatePlus financial planner if planners left

StatePlus

or became otherwise unavailable;g.did not have limits in place to ensure that its financial planners were only allocated the number

of

clients to whom they could reasonably be expected to provide Annual Review Services; h.prior to 30 April 2018, did not have centralised serviceability and capacity planning for its

financial planning network having regard to the delivery of an Annual Review Service to all

Advice

Clients; i.until at least 30 June 2018, maintained internal targets for 'prospect appointments' by financial

planners with prospective new clients that were inconsistent with the delivery of Annual Review

Services

to all Advice Clients having regard to the productivity and appointment capacity from time

to time of StatePlus financial planners; andj.prior to around 30 June 2018, did not have adequate risk and compliance procedures for

monitoring and reporting on the provision of Annual Review Services.

577779110Discovery of potential FFNS Conduct by StatePlus 22.On or around June 2016, FSS Trustee Corporation (ACN 118 202 672) (FTC), as trustee of the

First State Super Superannuation Scheme acquired StatePlus. Pre-acquisition due diligence identified potential FFNS Conduct by StatePlus. Upon completion of the acquisition, FTC replaced the StatePlus board. By no later than around 6 December 2016, then senior management and directors of StatePlus were aware that FFNS Conduct may have occurred in respect of up to approximately

15,000 clients paying advice fees to StatePlus of approximately $15.4m in the year

to November 2016 alone. By 27 April 2017, StatePlus' internal Risk & Compliance team had identified that Bundled Clients received Annual Review Representations and Contact

Representations.

On and from around May 2017, while still charging fees for Annual Review

Services,

StatePlus conducted further reviews of client files and prepared and implemented a remediation program in respect of FFNS Conduct which, from 2018, paid around $100 million to

Advice

Clients who in given annual periods on or after 1 April 2013 did not receive an Annual

Review

Service. C.SUMMARY OF RELIEF SOUGHT FROM THE COURT23.ASIC seeks the declaratory, pecuniary penalty order and other relief set out in the accompanying

originating process, including its costs. ASIC reserves the right to be heard on the form of the same at

the conclusion of the evidence to reflect the totality of the evidence adduced at the hearing.D.PRIMARY LEGAL GROUNDS FOR RELIEF SOUGHT24.Chapter 7 of the Corporations Act and Part 2, Division 2 of the ASIC Act impose important

consumer-protective obligations upon financial services licensees. If the holder of an AFSL offers to clients to provide financial services covered by its licence, and if it charges and accepts payment for them, it must have systems, procedures and controls in place to ensure they are delivered in a fair, efficient and honest manner (s 912A(1)(a)). If it represents in disclosure documents or statements that financial services will be provided, those documents are defective if it does not have

reasonable grounds for making that representation (s 953A(1)).25.From at least 1 April 2013, Annual Review Services were advice services for which all Advice

Clients

paid fees every month. By the start of the Penalty Period, there were not less than 30,000 such Advice Clients, and by its end, not less than 55,000. In contravention of s 12DI(3) of the ASIC Act (and in contravention of its general obligation to comply with the conditions on its AFSL (s

912A(1)(b))

and with the financial services laws (s 912A(1)(c))), StatePlus in trade or commerce accepted fees from those Advice Clients while there was objective uncertainty as to StatePlus' ability to provide the services on the scale, and in the time, required. StatePlus did not in fact deliver

those Annual Review Services on approximately 48,500 occasions. E.ALLEGED HARM26.The charging of fees to clients for services not provided deprived those clients of the value of fees

charged (until they were remediated). Approximately 36,000 Advice Clients both paid fees for advice and did not receive at least one Annual Review Service. StatePlus has remediated more than

$100 million to Advice Clients affected by its FFNS Conduct since 1 April 2013.27.Irrespective of remediation, however, representing and failing to ensure provision of financial

services impaired clients' ability to make decisions in their best interests regarding obtaining financial advice. Further, StatePlus' conduct did not promote confident and informed decision making by its clients and had the potential to distort consumer choice. Such conduct, including the ongoing charging of fees once StatePlus service failures were a known, unresolved issue, erodes the

community's trust and confidence in the administration of superannuation funds. Dated: 20 August 2020This concise statement was prepared by counsel, P A Neskovcin and L Hogan.

677779110Certificate of lawyerI Thomas Litchfield Jarvis certify to the Court that, in relation to the originating process filed on behalf

of

the Plaintiff, the factual and legal material available to me at present provides a proper basis for each

allegation in the pleading.Date: 20 August 2020

Signed by Tom JarvisLawyer for the Plaintiff

777779110Annexure ADocumentPeriodContentStatement of

Advice

or Record of

Advice1 April 2013 -

around

July 2017"Our one-fee approach is simple. Advice

services include:A financial planner who will assist by developing a financial plan for your future. SSFS does not charge you a separate financial planning advice fee or a separate fee for ongoing advice.Ongoing personalised financial planning advice and professional services into the future.Annual reviews and updates of your investments provide peace of mind that your retirement and investment plans remain on track.Asset allocation advice designed to suit your attitude to risk, personal resources and ongoing financial needs."Statement of

Advice1 April 2013 -

around

16 May 2016"Next StepsWhat I'll do:Prepare the paperwork for you to sign;Send you confirmation once your

transactions are complete.Organise an annual review to make sure you stay on track with your financial plan."Record of advice templatesTo March 2019Referred to StatePlus' 'one-fee approach' and advice services as including annual reviews.

Annexure B

Row Date of Annual Review

Representation Client ID Compensation paid

1

2/04/201357182,030.46$

2

2/04/2013111322,183.18$

3

2/04/2013111578,345.42$

4

2/04/2013183084,209.72$

5

2/04/2013218744,072.92$

6

2/04/2013221984,719.44$

7

2/04/2013222001,197.67$

8

2/04/20132706851.21$

9

2/04/2013270983,770.80$

10

2/04/2013273792,863.12$

11

2/04/2013280582,103.13$

12

2/04/2013367633,396.06$

13

2/04/2013415953,499.06$

14

2/04/2013424983,260.69$

15

2/04/2013436623,164.73$

16

2/04/2013442005,629.07$

17

2/04/2013463614,788.15$

18

2/04/2013492213,181.82$

19

2/04/20135116413,064.76$

20

2/04/201353413474.68$

21

2/04/2013571041,838.48$

22

2/04/2013571051,502.82$

23

2/04/2013597763,384.34$

24

2/04/2013600282,554.79$

25

2/04/2013639323,506.38$

26

2/04/2013649276,299.71$

27

2/04/2013657525,420.27$

28

2/04/2013704802,326.74$

29

2/04/2013705304,667.52$

30

2/04/2013708701,421.92$

31

2/04/20137206010,366.63$

32

2/04/2013720751,666.14$

33

2/04/2013723033,283.07$

34

2/04/2013

730256,240.55$

35

2/04/20137352412,053.22$

36

2/04/2013783852,076.31$

37

2/04/2013783862,190.16$

38

2/04/2013785072,318.23$

39

2/04/2013799733,035.35$

40

2/04/2013800764,599.23$

41

2/04/20138022810,591.79$

42

2/04/2013841282,773.13$

43

2/04/2013845876,181.76$

44

2/04/20138624610,811.63$

quotesdbs_dbs43.pdfusesText_43

[PDF] loi 13-83

[PDF] normes haccp boucherie

[PDF] laboratoire boucherie norme

[PDF] normes local boucherie

[PDF] plan laboratoire boucherie charcuterie

[PDF] gbph boucherie

[PDF] plan de nettoyage boucherie

[PDF] procédure veille réglementaire exemple

[PDF] lecture analytique l equipage

[PDF] l'équipage kessel résumé

[PDF] l équipage kessel lecture analytique

[PDF] procédure de veille réglementaire pdf

[PDF] veille réglementaire iso 9001

[PDF] oral moniteur educateur dc2

[PDF] processus veille réglementaire