ASIC accepts EU from advice firm
The Australian Securities and Investments Commission (ASIC) accepted an enforceable undertaking (EU) from a Sydney-based financial services company for providing inappropriate and difficult to understand self-managed super fund (SMSF) advice.
The EU came after ASIC investigated the Mascot based firm, Ascentiv Group, and its sole director, Chris Pappas.
It found that they allegedly were not giving best interest advice to their clients, and advised clients to establish SMSFs when it was not appropriate.
The corporate regulator said Ascentiv's statements of advice (SOA) were "very lengthy and difficult to understand, making it difficult for their Ascentiv's clients to make informed decisions about the advice provided to them".
ASIC also established that Ascentiv did not manage their conflicts of interest, monitor and supervise its representatives, or ensure their advisers were "adequately trained and competent" in providing SMSF advice.
Under the EU, Ascentiv has agreed to cancelled its Australian Financial Services Licence (AFSL) and write to some of its existing clients to inform them of the EU and the clients' right to dispute resolution, ASIC said.
ASIC deputy chairman, Peter Kell, said: "Self-managed super funds are not appropriate for everyone. It is important that the advice provided to clients of financial advisers is appropriate for those individuals' needs and circumstances".
"ASIC further expects that AFS licensees that provide SMSF advice to adequately monitor their representatives and have processes which lead to the provision of high quality SMSF advice."
ASIC said Ascentiv and Pappas were cooperating throughout the process.
Recommended for you
Unregistered managed investment scheme operator Chris Marco has been sentenced after being found guilty of 43 fraud charges, receiving the highest sentence imposed by an Australian court regarding an ASIC criminal investigation.
ASIC has cancelled the AFSL of Sydney-based Arrumar Private after it failed to comply with the conditions of its licence.
Two investment advisory research houses have announced a merger to form a combined entity under the name Delta Portfolios.
The top five licensees are demonstrating a “strong recovery” from losses in the first half of the year, and the gap is narrowing between their respective adviser numbers.
