The Federal Court has ruled that Tidswell Financial Services Ltd breached s 912A(1)(a) of the Corporations Act 2001 by failing to act efficiently, honestly and fairly when providing financial services under its AFS licence in relation to a super fund by outsourcing and failing to prevent misrepresentations.

See below for further details.

[Tax Month – July 2021]



Federal Court finds former superannuation trustee: Tidswell Financial Services failed to act efficiently, honestly and fairly

On 27 July 2021, the Federal Court made declarations that Tidswell Financial Services Ltd (Tidswell), failed to act efficiently, honestly and fairly when providing financial services.

The Court found that between 30 November 2016 and 14 February 2018, while it was a superannuation trustee, Tidswell:

  • failed to adequately monitor MobiSuper Pty Ltd (Mobi), 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 ASIC’s remaining claims against Tidswell. No civil penalties were sought. The Court instead ordered Tidswell to pay ASIC’s costs of $50,000.

Justice Jackson stated that ‘a superannuation trustee cannot 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’.

Justice Jackson further noted that Tidswell ‘needed to monitor what Mobi actually did, including how it marketed its services on its websites after initial approval for the websites was given, and what the CSOs (customer service operators) said to individual consumers’.

Upon request from Tidswell, APRA cancelled Tidswell’s Registrable Superannuation Entity (RSE) licence on 30 June 2021.

Separate legal action

ASIC’s court action against Mobi, ZIB and Andrew Grover is set for trial in November 2021 and alleges that Mobi offered an obligation-free ‘lost super’ search to get consumers to join and rollover their super into the Mobi sub-fund. ASIC also alleges that Mobi customer service representatives made misleading claims about fee savings and equivalent insurance cover and provided personal advice that was not in consumers’ best interests (19-301MR).


At the time of Tidswell’s conduct, contravention of section 912A did not carry a penalty but as a result of recent law reform, had Tidswell’s conduct occurred today, it would carry a penalty.

Tidswell is an Australian financial services (AFS) licensee and at the relevant time was an RSE licensee and superannuation trustee. APRA jointly regulated Tidswell and supported ASIC with its investigation, providing ASIC with a delegation of certain functions and powers under the Superannuation Industry (Supervision) Act 1993 (Cth).

On 1 January 2021, legislative reforms expanded ASIC’s role as conduct regulator for superannuation, and increased ASIC’s consumer protection powers. The reforms facilitate more effective regulation of superannuation trustee conduct.




(ASIC v MobiSuper Pty Ltd & Ors [2021] FCA 855, Federal Court, Jackson J, 27 July 2021.)

[ASIC media release 21-190MR; LTN 145, 30/7/21]

About the author