Slater & Gordon Limited (ASX:SGH) targets the banks with Get Your Super Back campaign

Slater & Gordon Limited (ASX:SGH) is targeting Commonwealth Bank of Australia (ASX:CBA) and AMP Limited (ASX:AMP) with its Get Your Super Back campaign…

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Slater & Gordon Limited (ASX: SGH) share price has been a big mover on Tuesday after announcing a new campaign.

In early afternoon trade the law firm's shares are up a sizeable 14% to $2.80.

What is the new campaign?

This morning the law firm announced the launch of its Get Your Super Back campaign.

The campaign will see Slater and Gordon attempt to bring big bank-owned super funds to account, alleging that the funds owe Australians more than one billion dollars.

While the law firm has indicated that the campaign will result in a series of legal actions, the first on its hit list appears to be superannuation funds owned by Commonwealth Bank of Australia (ASX: CBA) and AMP Limited (ASX: AMP).  These are Commonwealth Bank's Colonial First State and AMP Super.

Slater and Gordon is alleging that big bank-backed super funds failed to obtain competitive cash interest rates on cash option funds for members and charged exorbitant fees.

It estimates that millions of members who held part or all of their superannuation in bank owned funds have been impacted. This could be upwards of one-third of the adult population according to the release.

Slater and Gordon advised that the allegations arose from evidence to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.

Head of Class Actions Ben Hardwick stated that: "…millions of Australians may be out of pocket and a handful of banks have lined their pockets. Slater and Gordon doesn't think that's fair and we are saying, enough is enough."

He added that: "What funds like Colonial First State have been doing is dumping super with a parent bank such as CBA. The interest from the parent bank is so low that investors in the cash option are receiving rates as low as 1.25% a year. This is even below the RBA cash rate."

AMP was even worse, with the Royal Commission revealing that some of its "super fund members were getting negative returns on the cash held for them by AMP."

What now?

The market doesn't appear concerned by the legal action. Commonwealth Bank's shares are up 1.7% today and AMP's shares have edged 0.2% higher.

While a class action could do some damage to the banks, I wouldn't expect it to have a huge impact on their businesses. As such, I continue to believe that the majority of the banks are good value options for investors right now.

However, I wouldn't be in a rush to buy AMP shares just yet. I fear the Royal Commission may have damaged its brand significantly and it could take several years for a full recovery.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

Female miner standing smiling in a mine.
Broker Notes

Why Macquarie predicts Pilbara Minerals shares could surge 71%

Macquarie forecasts a big rebound ahead for Pilbara Minerals shares. Let’s find out why.

Read more »

Businessman working and using Digital Tablet new business project finance investment at coffee cafe.
Share Market News

Down 90% from its 2021 peak, can IDP Education shares turn around?

Is this beaten down stock a buy? Let's find out.

Read more »

Contented looking man leans back in his chair at his desk and smiles.
Share Market News

5 things to watch on the ASX 200 on Thursday

Will the market continue to rise? Let's find out.

Read more »

Man holding out Australian dollar notes, symbolising dividends.
Broker Notes

The smartest Australian stocks to buy with $250 right now

$250 to invest? Check out these stocks that brokers rate as buys.

Read more »

Rising gold share price represented by a green arrow on piles of gold block.
Share Gainers

2 ASX All Ords stocks that would already have more than doubled your money this year

These ASX All Ords stocks have gained 126% and 145% year to date. But how?

Read more »

A woman wearing dark clothing and sporting a few tattoos and piercings holds a phone and a takeaway coffee cup as she strolls under the Sydney Harbour Bridge which looms in the background.
Broker Notes

1 magnificent Aussie stock down 23% to buy and hold forever

Let's see why this could be a top share to buy while it is down.

Read more »

Ten smiling business people wave to the camera after receiving some winning company news.
Share Gainers

Here are the top 10 ASX 200 shares today

It was an historic day for the ASX, with the market setting a new record.

Read more »

Three people in a corporate office pour over a tablet, ready to invest.
Broker Notes

Top brokers name 3 ASX shares to buy today

Here's what brokers are recommending as buys this week.

Read more »