The Australian Securities and Investments Commission (ASIC) has commenced a civil penalty action against DOD Bookkeeping, formerly known as Equiti Financial Services (Equiti FS), for alleged breaches of prohibitions against conflicted remuneration, and failing to provide appropriate financial advice and carry out its best interest duty.
According to ASIC, Equiti FS was part of a group of companies known as Equiti Group, which offered SMSF establishment and administration services through Equiti FS, real estate services through Equiti Property and mortgage broking services through Equiti Finance.
The corporate regulator alleges that between 26 October 2015 and 27 August 2018, Equiti FS paid bonuses worth a total of $164,750 to three advisers after the settlement of property purchases, arranged by Equiti Property, that the advisers had recommended their clients make either through an existing SMSF or a soon-to-be-established SMSF.
The regulator alleges the bonus payments breached the ban on conflicted remuneration under the Corporations Act 2001 as the Equiti FS advisers could reasonably be expected to influence the provided financial product advice or the choice of recommended financial product to retail clients.
In addition, it alleges that between 18 May 2015 and 13 February 2018, the company was in breach of the Corporations Act after Equiti FS-employed advisers gave financial advice on 12 occasions, including a recommendation to establish an SMSF, purchase a property through the SMSF and borrow funds in order to do so, that was considered inappropriate and not in the clients’ best interests.
