Fund Regulatory Update
/Christian Super instructed to merge by July
The Australian Prudential Regulation Authority (APRA) has imposed additional licence conditions on the trustee of Christian Super, Christian Super Pty Ltd to address concerns regarding investment oversight, governance and strategic decision-making. Christian Super has also been chronically underperforming, which APRA would like to see corrected. Christian Super’s MySuper product failed its first annual performance test in August 2021.
Christian Super is now required to implement a merger strategy with a larger, better performing fund by July 2022.
La Trobe ordered to pay $750k after misleading marketing accusations
La Trobe Financial Asset Management is to pay a $750,000 fine imposed by the Federal Court after the Australian Securities and Investments Commission (ASIC) made accusations of false and misleading marketing. The judge overseeing the case, Justice O’Bryan, said the fund’s conduct was serious. La Trobe was found to have used the word ‘stable’ in newspaper, magazine and website advertising, implying no loss of capital was possible, constituting a misrepresentation of risk.
The fund also claimed the 48 Hour Account and the 90 Day Account enabled investors to withdraw funds between 48 hours and 90 days after providing a withdrawal notice, however, the fund actually has up to a year to complete withdrawal requests. In the case of the fund not being liquid, investors can only withdraw if an offer is made by La Trobe. ASIC said La Trobe’s statements regarding the fund didn’t clearly express the level of risk associated with it.
QSuper members file class action for overcharging on life insurance
Shine Lawyers are bringing a class action against QSuper on behalf of members, alleging the superannuation fund didn’t notify members of life insurance premium changes which resulted in financial losses for almost 140,000 members.
QSuper changed life insurance policy fees on 1 July 2016 without notifying members how to get cheaper premiums, with the majority of members impacted being Queensland government employees and their partners, teachers, and health industry workers like doctors. White-collar workers were charged the same inflated premiums despite not having the same risk in their jobs. It is alleged that QSuper took advantage of its members, with many losing money on investments.
