CFS to pay $20m penalty for misleading super members

19 October 2021
| By Oksana Patron |
expand image

The Federal Court has ordered Colonial First State Investments Limited (CFSIL), as trustee for the Colonial First State FirstChoice Superannuation Trust (FirstChoice Fund), to pay a penalty of $20 million for misleading communications with members. 

The court previously declared CFS had breached the Australian Securities and Investments Commissions (ASIC) Act and Corporations Act when communicating to members on at least 12,978 occasions.

According to the regulator, the misleading or deceptive conduct by CFS included:

  • Telling its members that legislative changes required Colonial to contact them and obtain an investment direction to stay in the FirstChoice Fund when that was not the case; and
  • Failing to tell members that if Colonial did not receive an investment direction from the member, it was required to transfer the member's superannuation contributions into a MySuper product.

ASIC deputy chair Sarah Court said: “The $20 million penalty handed down to Colonial is a timely reminder to superannuation trustees not to mislead members for their own benefit. Trustees have an obligation to provide their members with balanced and accurate information that enables them to make informed decisions about their retirement savings.

“Superannuation represents the future financial security of all Australians. We want to see funds operate in a way that is fair for members and promotes confidence in superannuation.”

According to ASIC, in his decision, Justice Murphy found that Colonial’s conduct “involved false or misleading representations made to approximately 13,000 members of the fund, in a concerted campaign which went on for more than two years” and that “its contravening conduct involved, in effect, seeking to take advantage of members whose interests it was, as trustee of the fund, duty-bound to protect.”

Colonial was also ordered to publish an Adverse Publicity Order and to pay ASIC’s costs.

Read more about:


Add new comment

The content of this field is kept private and will not be shown publicly.

Recommended for you

sub-bgsidebar subscription

Never miss the latest developments in Super Review! Anytime, Anywhere!

Grant Banner

From my perspective, 40- 50% of people are likely going to be deeply unhappy about how long they actually live. ...

5 months 4 weeks ago
Kevin Gorman

Super director remuneration ...

6 months ago
Anthony Asher

No doubt true, but most of it is still because over 45’s have been upgrading their houses with 30 year mortgages. Money ...

6 months ago

Jane Perry has been appointed non-executive director at an Australian life insurer....

6 minutes ago

While many investors were burned by property markets over the last few years, super fund executives say there are still gains to be made through thoughtful allocations to...

18 hours ago

The fund confirmed the change in its executive team will commence in the new financial year. ...

23 hours 35 minutes ago