ASIC issues civil penalty action against Equiti FS
The Australian Securities and Investments Commission (ASIC) has commenced civil penalty proceedings in Federal Court against DOD Bookkeeping, now in liquidation, previously known as Equiti Financial Services (Equiti FS).
ASIC alleged Equiti FS breached the prohibition against conflicted remuneration and failed to provide appropriate financial advice and discharge its best interests duty in relation to financial advice to selected clients.
Equiti FS was part of a group of companies called Equiti Group which offered self-managed super fund (SMSF) establishment.
ASIC alleged that between 26 October, 2015, to 27 August, 2018, Equiti FS paid three advisers bonuses totally $164,750 upon settlement of property purchases those advisers recommended their clients make through either an existing SMSF or an SMSF to be established.
The bonuses applied to purchases arranged by Equiti Property, another company part of Equiti Group.
ASIC alleged these bonuses breached the ban on conflicted remuneration under the Corporations Act 2001 because they could reasonably be expected to influence the financial product advice provided or choice of product recommended.
It was also alleged between 18 May, 2015, and 13 February, 2018, it breached the Corporations Act when its employed advisers gave financial advice on 12 occasions that was not in their clients best interests and was not appropriate for their clients.
Each advice contained a recommendation to establish an SMSF, purchase a property through the SMSF and borrow funds to do so.
Recommended for you
Doubt has been cast on whether Minister for Financial Services, Stephen Jones, will be able to progress the Delivering Better Financial Outcomes reforms within a year.
The financial advice profession should be embracing career changers and mature students, according to two commentators, as well as targeting those new graduates.
With Insignia’s sale of Millennium3 expected to see 140 advisers moving over to WT Financial by mid-December, this could cause a shift in which licensee closes out the year with the most advisers.
A financial adviser has been banned from giving personal advice to retail clients until 2025 after the FSCP found there is a “real risk of harm” to the public’s confidence in the industry if he remains registered.
COMMENTS