The Federal Court has made declarations that Tidswell Financial Services, failed to act efficiently, honestly and fairly when providing financial services and the corporate regulator will take it to court in November.
The court found that between 30 November, 2016, and 14 February, 2018, while it was a superannuation trustee, Tidswell:
- Failed to adequately monitor MobiSuper, the promoter one of its superannuation sub-funds, to ensure business model risks were addressed, including prevention of false or misleading representations and the risk of giving unauthorised personal advice; and
- Failed to comply with Prudential Standard SPS 231 Outsourcing as issued by the Australian Prudential Regulation Authority (APRA).
Justice Jackson made orders by consent that Tidswell had breached s912A(1)(a) of the Corporations Act and dismissed by consent the Australian Securities and Investments Commission’s (ASIC’s) remaining claims against Tidswell.
ASIC’s court action against MobiSuper, ZIB and Andrew Grover was set for trial in November 2021 and alleged that MobiSuper offered an obligation-free ‘lost super’ search to get consumers to join and rollover their super into the MobiSuper sub-fund.
The corporate regulator also alleged that MobiSuper customer service representatives made misleading claims about fee savings and equivalent insurance cover, and provided personal advice that was not in consumers’ best interests.
ASIC’s court action against Tidswell, MobiSuper, ZIB Financial and Andrew Grover (a director of Mobi and ZIB) was commenced following consultation and collaboration with APRA.
Upon request from Tidswell, APRA cancelled Tidswell’s registrable superannuation entity (RSE) licence on 30 June, 2021.
Justice Jackson said a superannuation trustee could not outsource its responsibilities to the present and potential members of its superannuation funds.
“Depending on the circumstances, it will often be necessary for the trustee to take active steps to make sure that the functions performed on its behalf by others are performed in the best interests of members,” Jackson said.
Jackson said Tidswell needed to monitor what MobiSuper actually did, which included how it marketed its services on its websites after initial approval for the websites was given, and what the customer service operators said to individual consumers.
Sarah Court, ASIC deputy chair, said superannuation represented the future financial security of Australians and as the conduct regulator for superannuation, ASIC was dedicated to promoting trust and confidence in the superannuation system.
“ASIC will continue to work to ensure trustees comply with their obligations to properly monitor the promotion of their products by outsourced service providers,” Court said.