An Australian financial services licensee that allowed an authorised representative to accept conflicted remuneration in regards to the establishment of SMSFs has been fined more than $500,000 in case taking over five years to settle.
The Australian Securities and Investment Commission (ASIC) stated RM Capital Pty Ltd had been ordered by the Federal Court to pay a $575,000 penalty, and its representative The SMSF Club Pty Ltd, had been ordered to pay a $350,000 penalty over the conflicted remuneration breaches.
The court order, made on 18 December 2025, follows a finding on 29 February 2024 RM Capital failed to take reasonable steps between August 2013 and August 2016 to ensure the SMSF Club did not accept conflicted remuneration.
During that period, SMSF Club was in a referral agreement with property agent Positive RealEstate Pty Ltd. To this end the court found on multiple occasions, between November 2014 and July 2016, SMSF Club accepted conflicted remuneration totalling $135,863.65 as referral fees from the property market entity.
The fees were paid for assisting SMSF Club clients to set up a self-managed super fund and purchase property from Positive RealEstate. On each of the 52 occasions when a referral fee was accepted, SMSF Club was considered to have breached the provision of the Corporations Act prohibiting an authorised representative from accepting conflicted remuneration.
The court added as licensee RM Capital also contravened section 963F of the Corporations Act by failing to take reasonable steps to ensure SMSF Club did not accept the payments.
ASIC commenced civil proceedings against RM Capital and SMSF Club on 7 June 2019 and deputy chair Sarah Court said: “The Court’s judgment reflects RM Capital’s systemic failure to uphold important consumer protection safeguards over a sustained, three-year period.”
Justice Jackson added: “That RM Capital took this passive approach even in the face of an ASIC investigation, an adverse liability judgment, and an approaching penalty hearing, suggests that from the point of view of specific deterrence, at least, a high penalty may be necessary to motivate it to change its approach”.
As part of the judgement, RM Capital and SMSF Club have a six month window to provide ASIC with a written report of an independent expert stating whether it has in place appropriate systems, policies and procedures to ensure its representatives comply with section 963G(1) of the Corporations Act.
