The Australian Securities and Investments Commission (ASIC) will cancel the Australian financial services licence (AFSL) of Austplan for failing to act in clients’ best interest in establishing SMSFs, among other deficiencies.
ASIC said it was concerned about the financial services firm’s ability to do everything necessary to ensure advice provided by its representatives was compliant.
The corporate regulator’s surveillance found shortcomings in the financial services provided by a number of Austplan’s representatives, including failing to take the best interest of clients into account when establishing SMSFs.
Austplan also received client referrals from building and mortgage business GM Homes Australia, which is not licensed to provide financial advice or any other financial service.
As part of the cancellation Austplan must comply with conditions such as maintaining its current professional indemnity insurance policy until the cancellation takes effect on 25 November.
ASIC will cancel Austplan’s licence in agreement with the licensee.
The firm must also maintain its membership of the Australian Financial Complaints Authority until all consumer complaints have been resolved.
Furthermore, it will have to submit the required financial statements with ASIC and retain all materials relating to personal advice provided by its representatives.
“SMSFs are not right for everyone. We encourage consumers to think carefully about investing in property and do their research before they set up an SMSF,” ASIC deputy chair Peter Kell said today.
“AFSLs have an obligation to ensure that their representatives are adequately trained and competent to provide financial services that are in their clients’ best interest.”
