The Australian Securities and Investments Commission (ASIC) has accepted a court enforceable undertaking (EU) from a Gold Coast-based accountant for receiving referrals from a property group in relation to establishing SMSFs.
ASIC found Saber Superannuation’s Jenan Oslem Thorne had failed to act in the best interests of her clients and prioritised her own interests above the clients’ interests.
The corporate watchdog decided to review Thorne’s advice when it found during its investigation into Park Trent Properties Group that she was receiving referrals in relation to setting up SMSFs from Park Trent.
ASIC reviewed advice provided by Thorne when she was a representative of AMP subsidiary SMSF Advice and found she had advised some of her clients to establish SMSFs without taking their circumstances into account.
It found she had not properly considered her clients’ existing super arrangements or explored why they were interested in investing in direct residential property through an SMSF.
When recommending SMSFs to some of her clients, it said she had inappropriately scoped the advice by excluding insurance and retirement planning.
It also found she did not adequately stress-test SMSF strategies and had recommended SMSFs to some of her clients despite inadequate evidence to suggest the strategies would result in increased retirement benefits.
Furthermore, she had recommended her accountancy practice, Saber Accountants, prepare the annual accounts and tax returns for the SMSF clients. This led ASIC to determine she recommended the services of a related party to generate extra revenue for herself.
The undertaking prevents Thorne (also known as Cenan Thorne or Cenan Dikmen) from providing financial services for a period of three years, effective from 13 February 2019.
As part of the EU, she has agreed to inform all her former personal advice clients about the EU and provide contact details of her former licensee, SMSF Advice.
ASIC advised former clients of Thorne who have inquiries or complaints about her advice or conduct to contact SMSF Advice.
It said it expects financial advisers to comply with their best interests duty and be diligent about how they scope their advice to clients.
“Prior to recommending SMSFs, advisers should critically probe why a client wants to set up an SMSF and what they hope to achieve,” it said.
“Advisers should also give adequate consideration to risk management and succession planning before setting up an SMSF for a client.”
ASIC commissioner Danielle Press warned SMSFs do not suit everybody and consumers should consider their personal circumstances before deciding to establish one.
