ASIC sues Mercer Financial Advice. Here’s why

June 30, 2022 06:54 PM AEST | By Sonal Goyal

ASIC sues Mercer Financial Advice. Here’s why — Image source: © Gajus | Megapixl.com

Why has ASIC sued Mercer?

ASIC has sued Mercer for allegedly misleading its customers regarding fees charged from its clients when no service was provided. In addition to this, the company failed to present fee disclosure statements.

Here’s the detail of the allegations imposed on Mercer.

Misleading customers: ASIC alleges that from July 2016 to July 2019, Mercer has made misleading representations on over 5,500 occasions. ASIC added that the company claimed to provide services, which it did not furnish. The company did not conduct any review meeting with its customers, in which the customer progress is measured against its financial plan. The meeting also includes a review of the customer’s financial position.

Customers were obliged to pay the fees for the no services provided. In addition to this, the clients had a binding contract with the company when it was not the case.

Fee disclosure statement – ASIC claims that over 2,100 customers were not provided with any fee disclosure statement or provided incorrect statements. In addition to this, Mercer was unable to ensure that the financial services covered under the company’s licence were provided in a fair, honest and efficient manner.

It is worth mentioning that Mercer compensated over 3,400 customers who paid fees for the services that might not have been offered from January 2012 to June 2019. The company had paid around AU$45 million in compensation.

What does ASIC want?

The regulatory body is seeking declarations of contraventions and financial penalties from the Federal Court against Mercer. Also, ASIC wants an order that the Mercer needs to disclose its contraventions. Contravention is an action not allowed by law, rule or treaty.

As per the ASIC release, the first case management hearing is not scheduled yet by the court.

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