The Australian Prudential Regulation Authority (APRA) has imposed additional licence conditions on Avanteos Investments Ltd (Avanteos) after it charged fees to thousands of deceased superannuation members.
Avanteos, which is a registrable superannuation entity (RSE) licensee, charged Advisor Service Fees to the accounts of 2234 deceased members between 2003 and 2018. The total financial impact was more than $6 million (inclusive of interest paid). All affected accounts have since been remediated.
Avanteos self-reported the issue to APRA in May 2018. The case was subsequently referred to APRA in February this year by the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
Following the completion of an APRA investigation, APRA has today imposed a range of additional licence conditions on Avanteos designed to avoid any such breaches reoccurring.
The historic nature of these breaches meant APRA was unable use new civil penalty provisions under the Superannuation Industry (Supervision) Act 1993, which only came into effect in April this year.
APRA Deputy Chair Helen Rowell said: "Charging fees for financial advice to deceased superannuation members, whether intentional or not, is a breach of superannuation licensees' legal obligations.
"However, by imposing additional licence conditions, we are ensuring Avanteos is held accountable, and that any ongoing weaknesses in governance or internal controls are identified and remedied. That is especially important until such time that Avanteos has rectified the internal controls and weaknesses that allowed these breaches to occur.
"APRA has been liaising with the Australian Securities and Investments Commission (ASIC), which continues to conduct its own investigation into these matters. We don't rule out taking further action against Avanteos should ASIC's inquiries raise additional matters of prudential concern," Mrs Rowell said.
APRA has also identified several other RSE licensees that may have charged fees to the accounts of deceased members. APRA is engaging with those entities to understand the cause and extent of any breaches, and determine the most appropriate supervisory response, including possible enforcement action.
The Australian Prudential Regulation Authority (APRA) is the prudential regulator of the financial services industry. It oversees banks, credit unions, building societies, general insurance and reinsurance companies, life insurance, private health insurers, friendly societies, and most members of the superannuation industry. APRA currently supervises institutions holding $6.5 trillion in assets for Australian depositors, policyholders and superannuation fund members.
