Mercer Financial Advice has been ordered to pay a $12 million penalty for charging fees to customers it wasn't entitled to charge and failing in its fee disclosure obligations.
Federal Court Justice Timothy McEvoy handed down the penalty on Thursday, writing that Mercer's contraventions were extremely serious.
"They were large in number, many clients were affected, large sums were involved, and they continued over a long time," the judge wrote.
Mercer had admitted the misconduct but said it was the result of inadequate processes and systems, rather than being anything intentional.
It has already paid remediation of around $45 million to customers charged fees for financial advice that wasn't provided.
Mercer had proposed a $8.5 million penalty, while the Australian Securities and Investments Commission had suggested a $20 million fine.
ASIC deputy chair Sarah Court called the $12.5 million judgement a significant penalty for a financial advice provider.
"ASIC expects businesses to invest properly in their compliance systems. As today's outcome shows, if they fail to do so, they face significant penalties," Ms Court said.
The violations involved breaches of the Corporations Act and the ASIC Act over a three-year period, from mid-2016 to mid-2019.
Mercer failed to invite 800 clients to attend annual review meetings that they were entitled to attend, failed to provide fee disclosure statements to over 500 clients, issued over 3,000 non-compliant fee disclosure statements to more than 2,000 clients, and charged 761 clients a combined $4.7 million in fees for services that clients didn't receive.
A subsidiary of US financial giant Marsh & McLennan, Mercer didn't immediately respond to a request for comment after the close of business hours on Thursday.
