Review of Public Trustee fees, charges and practices - where to now?
The Public Advocate's report Preserving the financial futures of vulnerable Queenslanders: A review of Public Trustee fees, charges and practices was tabled in the Queensland Parliament by Attorney-General and Minister for Justice, the Honourable Shannon Fentiman MP on 10 March 2021.
An Executive Summary of the report has also been released.
At the time of tabling, the Attorney-General announced that the government accepts in principle the majority of the 32 recommendations in the report and would undertake further consultation with stakeholders. As a first step, the Attorney-General announced the government will establish a Public Trustee board to provide oversight and direction to the Public Trustee and increase its transparency and accountability.
The government also committed to working in consultation with the Public Advocate to consider the recommendations.
The Public Advocate welcomes the government's response.
The Public Advocate undertook the review in response to concerns expressed by people with impaired decision-making capacity under administration with the Public Trustee and their supporters about the negative impact of the Public Trustee's fees and charges on their financial outcomes.
The Public Advocate released a media statement and the following video about the release of the report.
The review revealed a range of Public Trustee fees, policies and practices that suggest that the Public Trustee is breaching some of its legal and fiduciary duties and may fall short of community expectations of a public trustee agency. These included:
- the level and complexity of the Public Trustee's system of fees and charges, including charging multiple fees to manage the same funds
- a lack of transparency about the Public Trustee's fees, charges and investment practices
- whether the fees reflect the cost of providing the services to administration clients or whether they are paying a premium on their fees to subsidise other Public Trustee services and activities including its community service obligations
- the practice of routinely obtaining and charging clients for potentially unnecessary independent financial advice that invariably recommends investing client funds in Public Trustee products in accordance with its prescribed investment approach
- the Public Trustee earning revenue from its clients' funds, and
- the way Public Trustee uses the Official Solicitor and charges legal fees to clients.
The Public Advocate has now had an opportunity to review the government's and the Public Trustee's formal responses to the report. The government response refers 23 of the report's 32 recommendations to the Public Trustee to implement, acknowledging that the "Public Trustee has provided a comprehensive response to the Public Advocate's Report and its recommendations".
However, the Public Trustee rejected key findings and recommendations of the report, particularly those dealing with breaches of fiduciary duties. The Public Trustee's position raises concerns about its organsational capacity and commitment to implement those key recommendations, to ensure the rights and interests of vulnerable Queenslanders are protected.
The Public Advocate has written to the Public Trustee about the inconsistencies between the government's response to the report.
These concerns were also raised with the Attorney-General, including that the review of fees and charges announced by the Public Trustee could be a waste of time and resources without the government having first settled critical policy decisions, such as the proportion of earnings on clients' funds that the Public Trustee is permitted to retain for its own purposes and the amount of free services (community service obligations) the Public Trustee should provide to the community, and how they are to be funded.
The Attorney-General has assured the Public Advocate that any conclusions from the fees and charges review will not dictate government's consideration of the issues raised in the report or limit the government's options for reform. The Public Advocate welcomes the Attorney-General's assurances.
When tabling the report, the Attorney-General referred to the Public Trustee's extensive program of reform that is currently underway. While these reforms are welcomed, they do not address some of the significant issues that were identified in the report, particularly those relating to breaches of fiduciary duty.
It is now almost five months since the Public Advocate's report was tabled and the Public Trustee continues to operate in breach of its fiduciary duties. These are not historical issues as some have suggested, although they have been part of the Public Trustee practice for many years. The Public Advocate urges the Queensland government to act swiftly to ensure the Public Trustee immediately ceases all activities that constitute breaches of fiduciary duty and other unacceptable practices. It is important to remember that vulnerable people are suffering daily from the impacts of these policies and practice, and need relief.
For its entire 105-year history, the Public Trustee has not been subject to any significant review or reform. What might have been appropriate practice in 1916 for a trustee or fiduciary, no longer meets modern expectations of these roles. This is a once in a lifetime opportunity for the Queensland government to reform the Public Trustee to transform it into a modern, transparent and accountable trustee agency that has the trust and confidence of the Queensland community. Vulnerable Queenslanders deserve nothing less.