With the 2023–24 financial year behind us, Money Management takes a look back on the Australian financial services licensees that were hit with enforcement action.
Last week, Money Management reviewed the financial advisers who fell under ASIC’s enforcement spotlight in the past financial year.
We now take a look at some of the most noteworthy licensees that received enforcement action by the regulatory body in the past 12 months.
Appearing before the Senate economics committee in June, ASIC deputy chair Sarah Court said it is a “case by case basis” whether the regulator pursues individual advisers or the Australian financial services licence (AFSL) holder in these circumstances.
July 2023
Former royal commission case study receives penalty for unconscionable conduct
The financial year began with the Federal Court imposing a combined $13.5 million penalty on Select AFSL, BlueInc Services and Insurance Marketing Services for engaging in unconscionable conduct. ASIC’s case concerned the mis-selling of life, funeral and accidental injury insurance over the phone to consumers, including First Nations consumers from remote communities.
August 2023
ASIC suspends Perth-based AFS licence
Perth-based investment firm NWQ Capital Management’s AFSL was suspended until 25 January 2024 due to unmet financial requirements as ASIC cracked down on market misconduct.
October 2023
Global advice group sees assets frozen by Federal Court
Brite Advisors, a global advisory firm, was ordered by the Federal Court in October 2023 to freeze its funds and assets for failing to lodge financial statements. Two months later, two corporate receivers were appointed to investigate the $1 billion client pension funds under its management.
November 2023
Perth advice practice sentenced for dishonest conduct
Fong Financial Planners, a former AMP authorised representative which pleaded guilty to the charges in March 2023, was convicted in the District Court of Western Australia for three counts of dishonest conduct at the end of November 2023.
January 2024
Sydney advice firm sees ASIC’s first 2024 licence cancellation
In the first month of the 2024 calendar year, ASIC cancelled the AFSL of Sydney-based advice firm Indie Advice. The regulator became aware that the firm had “not been providing financial services for some time” despite being authorised to provide financial advice to retail and wholesale clients.
February 2024
NextGen sees AFSL cancelled by ASIC
ASIC cancelled the licence of NextGen Financial Group in February 2024. The firm had a torrid history, with the case first commencing when the firm was ordered by the Federal Court in July 2023 to pay an SMSF trustee $270,000 over an unpaid Australian Financial Complaints Authority (AFCA) determination regarding inappropriate financial advice.
In September 2023, the plaintiff in the case, WJ & V Drakoulis Super Pty Ltd, applied for NextGen to be wound up and a hearing was held on 3 October. The firm formally entered into liquidation in November 2023 after losing the Federal Court case regarding the unpaid AFCA determination.
March 2024
Troubled investment firm sees AFSL cancelled
ASIC cancelled the AFSL of troubled investment firm Endeavour due to the firm being in liquidation and wound up, an action that took place in March 2019.
ASIC cancels Sydney advice firm’s AFSL
In the same month, Sydney advice firm Crown Wealth saw its licence cancelled by the regulator as it had entered into voluntary administration and also saw dwindling adviser numbers.
April 2024
‘Licensee for hire’ Lanterne receives Federal Court penalty
The Federal Court issued a $1.25 million penalty against Lanterne Fund Services, a wholesale licensee which operated as a “licensee for hire”. ASIC commenced civil penalty proceedings against Lanterne in July 2022 for a failure to meet organisational competence requirement and a failure to have adequate risk management systems. This was one of the first litigated cases related to a “licensee for hire” and the contraventions of that business model.
ASIC cancels AFSL of Brisbane advice firm
Later that month, ASIC cancelled the licence of Brisbane-based JB Markets following its previous suspension in November 2023. The regulator considered that it was reasonable to believe that JB Markets was likely to breach financial services laws.
May 2024
AFSL cancellations hit double digits with Queensland advice firm
The cancellation of Gold Coast advice firm Octillion Partners’ licence marked ASIC’s 10th AFSL cancellation since the start of 2024. The decision was taken as Octillion’s authorised representative and financial adviser, Shane Allan Rose, was alleged to have engaged in dishonest conduct by using client invested funds for purposes other than they were given.
June 2024
ASIC takes action on two Queensland AFSLs
The regulator took action against two Queensland-based firms in the last month of FY24. Responsible Entity Services Limited saw its licence suspended until 11 June 2025 due to the firm being under external administration, while Haywards Audit Pty saw its AFSL cancelled as the firm was no longer carrying on a financial services business.
Melbourne AFSL receives interim orders from Federal Court
Ending the financial year, ASIC obtained interim orders from the Federal Court to freeze the assets of advice licensee United Global Capital Pty Ltd (UGC) and related property investment company Global Capital Property Fund Limited (GCPF), an authorised representative of UGC since 2020.
