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Was ‘fair exchange of value’ fee for no service?
The concept of “fair exchange of value” has been aired at the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry in the context of National Australia Bank (NAB) seeking to retain adviser fees in relation to superannuation fund members not actually receiving advice.
The former chair of the MLC Superannuation trustee, NULIS, Nicole Smith confirmed that a paper had been developed seeking to justify the “fair exchange of value” concept and that this had been opposed by the Australian Securities and Investments Commission (ASIC).
Under questioning from counsel assisting the commission, Michael Hodge QC, Smith agreed that the concept was based on the banking group agreeing to provide a service and could therefore justify keeping fees.
Smith said she was aware of ASIC’s concerns with respect to the proposition amounting to fee for no service and agreed with ASIC on the issue.
The Royal Commission was told that the issue of “fair exchange of value” was being contemplated within NAB/MLC as recently as late last year and January, this year.
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