Mercer fined $12m over dodgy fees and disclosure failures

The news: Financial services company Mercer will pay a $12 million penalty for misleading customers with inaccurate fee disclosure and charging fees for no service. The fine was ordered by the Federal Court following action lodged by ASIC.

The numbers: Between mid-2016 and mid-2019, Mercer was found to have charged clients $4.7 million in fees for services not received and failed to invite 800 clients to annual review meetings. It also failed to provide fee disclosure statements to more than 500 clients and issued more than 3000 non-compliance fees.

The context: Mercer has already paid $45 million in remediation to 3,400 customers charged feeds for financial advice they may not have received between 2012 and 2019. As of December 2022, $4.7 billion in compensation has been paid by Australia's biggest financial institutions over fees for no service misconduct or non-compliant advice, ASIC said.

What they said: "These failures occurred in part because Mercer failed to maintain the necessary systems and processes to ensure that the disclosure statements sent to customers were timely and accurate," ASIC deputy chair Sarah Court said in a statement.