ASIC commenced Federal Court action against MLC Nominees and NULIS today in relation to the significant advice fees charged to superannuation members despite no financial advice being provided.
ASIC alleges NULIS and MLC Nominees - the current and former super trustee of NAB - misled members of MLC MasterKey Super products, with the regulator seeking declarations of contravention and a civil penalty.
ASIC also claims NULIS and MLC Nominees charged 220,000 members of MLC MasterKey Business and MLC MasterKey Personal Super about $33 million in Plan Service Fees despite them being No-Adviser Members.
NAB also deducted about $67 million in 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 at all or any services that weren't already freely available.
ASIC believes MLC Nominees and NULIS contravened the Corporations Act by failing to ensure services were provided efficiently, honestly and fairly when it deducted the $33 million in fees, and made false or misleading representations to No-Adviser Members by claiming it was entitled to deduct those fees and members were obliged to pay them.
The two entities also breached the Act by deducting the $67.1 million in fees without providing services and did not disclose that those fees could be turned off by the member.
Further, both entities are alleged to have issued 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."
Finally, by deducting the fees and making said misrepresentations NULIS and MLC Nominees failed to act in the best interests of members; a breach of general law duties and the Superannuation Industry (Supervision) Act 1993.
In response, NAB chief legal and commercial counsel Sharon Cook said NAB is still assessing the details of the case.
"We will consider carefully the allegations that have been made," Cook said.
"We respect the work of our regulators and will work with ASIC on these matters."
The Federal Court action is part of ASIC's ongoing investigations into fee for no service failures in the financial services industry. Overall, remediation for impacted customers is expected to exceed $850m.
Earlier this week, NAB announced NAB Financial Planning (FP) and NAB Direct Advice will no longer accept grandfathered commissions from NAB Wealth superannuation and investment product providers. About 32,000 super and investment customers are expected to benefit from the decision.