5 year adviser ban connected to setting up SMSFs for borrowing

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ASIC has banned a financial adviser from providing financial services for five years, in connection to advice on SMSF borrowing.

The regulator announced that Gold Coast adviser Daniel John Renneberg had been banned from providing financial services for five years for failing to act in the best interest of his clients.

ASIC reviewed the advice received by 15 of his clients, finding that Renneberg had received referrals from GM Homes Australia Pty Ltd to set up SMSFs to buy investment property.

“ASIC found that Mr Renneberg had not provided the clients appropriate financial advice or acted in their best interests. He had advised some clients to set up SMSFs with limited recourse loan arrangements that were completely unsuitable and placed his clients in a vulnerable financial position,” said ASIC.

“Mr Renneberg completely failed to consider his clients’ needs, objectives and circumstances. Mr Renneberg also failed to give his clients statements of advice that set out the advice he provided and the information on which he based his advice.”

ASIC noted that Renneberg can seek a review of ASIC’s decision from the Administrative Appeals Tribunal.

ASIC Commissioner Danielle Press said that SMSFs weren’t for everyone and that borrowing in an SMSF to buy property was a high-risk strategy.

“ASIC will be looking very carefully at advisers who recommend this strategy and taking swift action where we see problems,” Press said.

“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.”

“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.”

Renneberg was an authorised representative of Austplan Pty Ltd, which had its licence cancelled in November 2018 by agreement with ASIC. At the time, ASIC said:

ASIC was concerned about Austplan’s ability to do all things necessary to ensure the advice provided by its representatives was compliant. Its surveillance found deficiencies in the financial services provided by a number of Austplan representatives, including their failure to act in the best interest of their clients in relation to establishing self-managed superannuation funds (SMSF). 

Austplan also received client referrals from GM Homes (Australia) Pty Ltd, a building and mortgage business, which is not licensed to provide financial advice or any other financial service.  

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