The Australian Securities and Investments Commission (ASIC) is seeking interim and final orders from the Supreme Court of New South Wales to prevent property investment promoter Park Trent Properties Group from operating a financial services business without a licence.
The corporate regulator said it believed at least 500 people established and switched their retirement savings assets across to an SMSF on the advice of Park Trent in order to then invest in properties either owned or promoted by Park Trent.
As a result, ASIC is alleging and is seeking declarations the property group ran a financial services business without an Australian financial services licence.
Orders are also being sought forcing Park Trent to notify current and former clients about the regulator’s action and post a website message about the proceedings.
The matter is scheduled to be heard on 26 November.
In response to the development, the SMSF Professionals’ Association of Australia (SPAA) praised ASIC’s attempt to stop Park Trent from carrying on an unlicensed financial services business.
“SPAA has long been critical of property developers and property investment entities advising consumers to establish an SMSF to buy an investment property, so for ASIC to initiate legal action is a positive step towards ending this unscrupulous behaviour,” SPAA chief executive Andrea Slattery said.
Trustees needed to consider the SMSF’s investment strategy as a whole as well as their own long-term retirement objectives when looking to invest in property, Slattery said.
“In SPAA’s experience, many trustees, and those thinking of establishing an SMSF, need to get specialist advice when deciding to set up an SMSF or put together an investment strategy,” she said.
“SMSFs are a proven vehicle for Australians to become more engaged with their superannuation, but it is important that the right safeguards are in place to protect the integrity of the sector. This announcement by ASIC is an important step in that direction.”