Failure to comply with a Court Enforceable Undertaking has seen a Gold Coast accountant and former authorised representative forced to pay the court costs of the Australian Securities and Investments Commission (ASIC) to the tune of $16,529.78.
The accountant, Jenan Oslem Thorne, has also been forced to write to all of her clients declaring that she is prevented from providing financial services for a period of three years and noting that they are receiving the letter because they are people to whom she provided personal advice an authorised representative of SMSF Advice Pty Limited.
ASIC announced on 12 March that Thorne was compelled by the Federal Court orders to comply with the terms of the court enforceable undertaking first entered into in February 2019 following an investigation which found she failed to act in her clients’ best interests and that she prioritised her own interests above those of her clients.
Commenting on the Federal Court’s decision, ASIC Commissioner Danielle Press said, “ASIC first took action in this matter because the law requires that financial advisers act in their clients’ best interests. Those providing financial services must not prioritise their own interests or simply implement client instructions.
“Individuals and organisations entering into court enforceable undertakings with ASIC have binding obligations that must be met to ensure compliance. ASIC will not hesitate to take action against those who don’t comply with their obligations.”
It had earlier been found that Thorne had recommended clients establish an SMSF despite inadequate evidence to suggest the strategies would provide increased retirement benefits and had then suggested they use her accountancy firm to prepare the annual accounts and tax returns of those SMSFs.
Comments
THIS is what we need ASIC actually doing - shutting down shonky practices that funnel consumers into inappropriate vehicles to serve their own purposes. THIS is the kind of behaviour that has been destroying financial planning for decades now - SMSF's are the new frontier of garbage advice, particularly when there is a friendly neighbourhood property developer nearby.
Mike, you (or you editor) have titled this story "The hefty cost of not complying with an ASIC EU".
Frankly, I can't see how being obliged to pay ASIC's costs of just over $16,500 could in any way be termed "a hefty cost". My estimate is that the ASIC's court costs represent, in the worst case scenario, less than one month of fee income for the accountant's practice.
Not to mention that it has taken ASIC just over two years to actually enforce the EU entered into in February 2019. As it now stands, the EU itself has less than a year to run -- after that it will be "business as usual" for this accountant.
Some victory for ASIC -- NOT
16K a hefty cost? Would have made more than that on one SMSF with a SOA and auditing. Peter the new frontier is SMSF/ Sell the property too. So you register as a real estate agent, drop the advice crap as its too hard, resign from the dealership and just become a real estate agent. Call your old clients and tell the clients to "get advice" and open up a SMSF, sell them the unit off the plan with no advice and call yourself a investment property concierge. There are many SMSF buying units off the plan, some are going well others are going bad. ASIC does not police this area at all, they let real estate agents take commissions from property developers all the time, then the agents get commission of about 3% on the sale price as well. The clients get stuck with ever increasing strata fees untill the SG payments dont cover the ever increasing bills....yes asic could not give a hoot about this area, its all chasing up us for not giving a FDS every 12 months, easy prey we are.
Australia's "consumers associations" are now more concerned with fringe political activism, and its "consumer protection regulators" are more concerned with indiscriminate persecution of licensed advisers. No-one is standing up for consumers' real interests anymore.
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