Property spruiker gave unlawful advice for five years
The Supreme Court of NSW has found Park Trent Properties Group unlawfully carried a financial services business for over five years.
The property spruiker was found to have provided advice to clients to purchase investment properties through a self-managed super fund (SMSF).
In November 2014, the Australian Securities and Investments Commission (ASIC) launched legal proceedings and by the time of the trial in June 2015, the firm had advised over 860 members of the public to establish and switch funds into an SMSF.
Handing down his judgement, his Honour Acting Justice Sackville said the business model depended on "persuading relatively unsophisticated investors of the virtues of using their superannuation accounts to purchase investment properties and to establish SMSFs".
"Investors were influenced to make important decisions concerning their superannuation strategy with little or no genuine consideration of whether the decision took proper account of their individual financial circumstances. Some suffered financial loss as a consequence," he said.
Sackville also said the firm's chief executive, Ronald Cross' role was to show a "willingness to ignore legal advice as to the nature of Park Trent's statutory obligations".
He said the decision served as a warning to others who seek to influence clients to establish SMSFs for investment purposes, without having the necessary licence.
ASIC deputy chairman, Peter Kell, said: "Property spruikers who recommend people invest in property via SMSFs, or facilitate such an investment, and who do not have an Australian financial services licence are breaking the law".
"It is important that advisers who deal with SMSFs are appropriately licenced because the important safeguards and standards that come with being licenced are in place for a sector which is of growing importance to more Australian investors," Kell said.
Recommended for you
The Federal Court has dismissed a conflicted remuneration case brought by ASIC against the director of life insurance distributor Freedom Group, where Bali holidays and Vespa purchases were among sales incentives.
Policy and advocacy specialist Benjamin Marshan has left the Council of Australian Life Insurers after less than a year, having joined in March from the Financial Planning Association of Australia.
The declining volume of risk advisers meant KPMG has found a rising lapse rate for insurance policies arranged by independent financial advisers, particularly in the TPD and death cover space.
The Life Insurance Code of Practice has transferred from the Financial Services Council to the Council of Australian Life Insurers.
