The Australian Securities and Investments Commission (ASIC) has taken another step in its pursuit of its first prosecution against a financial planning provider for alleged Future of Financial Advice (FoFA) breaches.
The regulator said it had obtained an order which required financial services business "Yes FS" to change how it deals with its clients until the trial of proceedings for alleged breaches of the Corporations Act and ASIC Act, including breaches of the 'best interests' obligation.
It said the Federal Court had made the order against three entities operating as the "Yes FS" business, namely:
Wealth and Risk Management Pty Ltd (WRM), the holder of an Australian financial services licensee (AFS licensee); Jeca Holdings Pty Limited (which trades as Yes FS and does not hold an AFS licence); and Yes FP Pty Ltd (which is a representative of WRM).
It said the Court had made the order on the basis that there was an 'appreciable risk' that WRM would not prevent breaches of the 'best interests' obligation of the Corporations Act by its representatives and that the Yes FS business would breach the obligation not to operate a financial services license without an AFS licence.
ASIC said the order prohibited the Yes FS business from making, offering or promoting cash payments to prospective clients in connection with the provision of financial advice in relation to superannuation or the purchase of insurance products; the promotion of such payments on the internet; and Jeca Holdings Pty Ltd from carrying on a financial services business.
The order is in place from 3pm on 8 May 2017 until the start of the trial on 2 October 2017.