Mercer Australia 

The Court found that Mercer Financial Advice (Australia) Pty Ltd (ACN 153 168 293) (MFA) had committed contraventions of the Corporations Act 2001 and the Australian Securities and Investments Act 2001 in relation to the inadequate issuing and contents of fee disclosure statements, the charging of ongoing fees for financial advice services without entitlement, and related system deficiencies.

On 23 November 2023, Justice McEvoy of the Federal Court ordered MFA to pay a pecuniary penalty of $12 million to the Commonwealth. From 1 July 2016 to 30 June 2019, MFA had committed:

• 1,237 contraventions of s 962P of the Corporations Act by continuing to charge ongoing fees to 761 retail clients, despite the applicable ongoing fee arrangement having been terminated through MFA’s failure to provide them with a fee disclosure statement;
• 2,933 contraventions of s 962S(1) of the Corporations Act by failing to give 1,578 retail clients a fee disclosure statement as required by that provision; and
• 5,881 contraventions of s 12DB(1) of the Australian Securities and Investments Act, by making false or misleading representations within fee disclosure statements provided to retail clients.

MFA failed to provide fee disclosure statements to certain retail clients. Other retail clients received fee disclosures statements that were deficient in that they failed to adequately disclose and were misleading as to significant financial services to which the client had been entitled but had not used.

Affected clients suffered $14,465,343 in inappropriate ongoing fees.

MFA has remediated these clients and others affected earlier. It cooperated with ASIC in the investigation, commencement and finalisation of the proceeding. MFA made full admissions at the earliest opportunity.

The Court ordered MFA to publish this Misconduct Alert.

Further information

For further information, visit ASIC’s media release.