Colonial First State Investments has reached an in-principle agreement to pay $100 million to settle a class action claim in relation to adviser commissions and fees charged to super members between July 2013 and June 2020. 

Slater and Gordon filed the group lawsuit, alleging the business charged excessive fees as part of arrangements the super trustee had to pay ongoing commissions to financial advisers, who were not required to provide continuing services to customers in return. 

The lawsuit alleges the wealth manager, part of the Commonwealth Bank until 2021, did not act in the best interest of thousands of customers who were members of its FirstChoice Superannuation Trust product by continuing to charge existing members high fees under the commission arrangements. 

“This is despite legislation being introduced that banned the charging of commissions on new super accounts from 2013 onwards,” Slater and Gordon said. 

Colonial First State Investments says in agreeing to resolve the litigation, the wealth manager “continues to deny the allegations and makes no admissions of liability or wrongdoing”. 

The two parties agreed to settle following a confidential Court-ordered mediation on June 16 and the $100 million settlement is subject to court approval. 

“If the court approves the settlement, eligible group members will each recover a share of the agreed settlement sum of $100 million, after accounting for any deductions which may be approved by the Court,” Colonial First State Investments said. 

Deductions may include things like legal fees charged by the applicants’ lawyers and any commission approved by the Court to be paid to the funder of the class action. 

The wealth manager expects that a notification of the in-principle settlement will be sent to eligible group members next month.