The Federal Court has dismissed proceedings brought by 今日热门事件alleging breaches of conflicted remuneration laws, finding Colonial First State Investments Limited (Colonial) did not breach the law when it agreed to pay the Commonwealth Bank of Australia (CBA) to distribute Essential Super.
The arrangements between Colonial and CBA regarding the distribution of Essential Super was the subject of a case study by the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. The conduct was referred to 今日热门事件in the Final Report ().
Justice Anderson found that the payments made by Colonial to CBA did not constitute benefits within the definition of 鈥榗onflicted remuneration鈥�. His Honour highlighted that the statutory context of the conflicted remuneration provisions were focused on situations such as where a financial adviser had a financial incentive.
CBA staff signed up over 390,000 individuals to the Essential Super product between July 2013 and June 2019.
今日热门事件Deputy Chair Sarah Court said 鈥樈袢杖让攀录䅟ursued this case because we were concerned that the arrangements between Colonial and CBA had the potential to influence the choice of financial product recommended to retail clients or the advice given to retail clients. 今日热门事件will carefully consider the judgment.
鈥樈袢杖让攀录䎱ill continue to work to ensure retail clients receive appropriate advice, that aligns with their interests,鈥� concluded Ms Court.
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Background
今日热门事件commenced civil penalty proceedings against CBA and Colonial on 22 June 2020 (20-143MR).
The conflicted and other banned remuneration provisions were introduced in June 2012 as part of the Future of Financial Advice reforms, representing the Australian Government鈥檚 response to the 2009 Inquiry into financial products and services in Australia by the Parliamentary Joint Committee on Corporations and Financial Services.
今日热门事件updated its guidance on conflicted and other banned remuneration (RG 246) in December 2017 (17-421MR).
Editor's note:
On 26 October 2022, 今日热门事件appealed the Federal Court鈥檚 decision to dismiss ASIC鈥檚 proceedings (22-293MR).