Advising super consolidation leads to 5 year exclusion from industry

Financial Literacy Australia will be receiving $400,000 as part of an Enforceable Undertaking accepted by ASIC in connection with a business that advised people to consolidate their superannuation.

ASIC announced that it has accepted an Enforceable Undertaking from David Orth, who was the director of Real Wealth Pty Ltd. Part of the Undertaking involves him not providing financial services for five years.

ASIC says that Mr Orth developed and implemented a business model under which “representatives of Real Wealth would offer to assist clients complete a lost superannuation search and then make representations to them about the advantages of consolidating their existing superannuation funds into a single superannuation fund, and the returns on that fund.”

“Real Wealth did not take into account the personal circumstances of clients or make reasonable inquiries regarding the clients’ objectives, financial situation or needs.”

“Further, Real Wealth did not conduct a reasonable investigation into alternate financial products which might achieve and meet clients’ objectives and needs most – instead often using a single fund that they had a relationship with, HUB24.”

According to ASIC, Real Wealth charged clients 4.4% of the total balance of their superannuation. A ‘general advice’ warning was provided, but not a Statement of Advice.

Under the Enforceable Undertaking Mr Orth has agreed that he wont, for the next five years, provide financial services, be director a company that holds an AFSL or is an authorised representative, hold out that he holds an AFSL or apply for an AFSL. He will also pay $400,000 to Financial Literacy Australia.

Want to be kept up-to-date with SMSF and Superannuation changes, why not subscribe to our Newsletter?

This article, as with all content on this site, is for informational purposes only, and is not legal, financial, tax or other advice. Please read our Terms and Conditions of Use.

Leave a Reply

Your email address will not be published. Required fields are marked *