ASIC, Financial Planning

Qld adviser banned for five years

The Australian Securities and Investments Commission (ASIC) has banned a Queensland financial adviser for five years after it found he failed to act in the best interest of clients when providing advice on the establishment of an SMSF and the associated use limited recourse loan arrangements (LRBA).

The regulator banned Daniel Renneberg of the Gold Coast following a review of advice provided to 15 clients while he was an authorised representative of Austplan and found he received referrals from GM Homes Australia to help their clients establish an SMSF to purchase an investment property.

ASIC noted that GM Homes – a building and mortgage business – was not licensed to provide financial advice or any other financial service and the advice Renneberg had provided was not appropriate nor did he act in the clients’ best interests.

In particular the regulator claimed he advised clients to set up SMSFs involving LRBAs that were unsuitable and placed the said funds in a vulnerable financial position. In doing so, ASIC added Renneberg completely failed to consider his clients’ needs, objectives and circumstances.

Further it was found he failed to provide statements of advice setting out the advice he provided and the information on which he based that advice.

ASIC Commissioner Danielle Press said the regulator would be looking closely at advisers who recommended the setting up of an SMSF to borrow money and buy property labelling it a high-risk strategy.

“Financial advisers must not rely solely on client direction when establishing an SMSF. They must adequately demonstrate why an SMSF is appropriate and why it is in their clients’ best interests,” Press said.

“ASIC expects financial advisers to use their skills, expertise and judgement in determining whether an SMSF is indeed appropriate for their clients’ personal circumstances and needs,” she added.

Renneberg was an authorised representative of Austplan from March 2015 to June 2018, and the sole director when its Australian Financial Services license was cancelled by agreement with ASIC in November 2018.

At that time, ASIC expressed concerns over Austplan’s ability to do all things necessary to ensure the advice provided by its representatives was compliant with the law.

The regulator added its surveillance found deficiencies in the financial services some Ausplan authorised representatives provided, including their failure to act in the best interest of their clients in relation to establishing SMSFs.

Renneberg has the right to seek a review of ASIC’s decision before the Administrative Appeals Tribunal.

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