The Australian Securities and Investments Commission (ASIC) has commenced civil penalty proceedings in the Federal Court against Mercer Financial Advice (Australia) Pty Ltd for allegedly making false or misleading representations to its customers about fees charged and services that were not provided, and for failing to provide fee disclosure statements.

ASIC claims that between July 2016 and June 2019 Mercer made false or misleading representations on more than 5,500 occasions, by claiming that:

• it had provided all of the services it was required to provide, when it had not. Specifically, Mercer failed to provide review meetings to its customers, which were formal meetings with a financial adviser to track a customer’s progress against their financial plan and to review their financial position;
• the customer was obliged to pay fees that the customer was not obliged to pay; and
• the customer had a binding contract with Mercer when that was not the case.

The regulator further alleges that Mercer failed to provide fee disclosure statements, or provided inaccurate statements, to more than 2,100 customers and failed to do all things necessary to ensure the financial services covered by its licence are provided efficiently, honestly and fairly.

Mercer has already completed a remediation program for more than 3,400 customers who were charged fees for financial advice that may not have been provided between January 2012 to June 2019, resulting in compensation of approximately $45 million.

ASIC is seeking declarations of contraventions and pecuniary penalties from the Court, as well as an order that Mercer be required to disclose its contraventions to the public.

ASIC has previously taken action against National Australia Bank (NAB) for failures relating to fees for no service and misleading fee disclosure statements. The regulator has also previously commenced several other proceedings concerning charging fees for no service, including against Westpac, Aware Financial Services, OnePath Custodians and AMP.