ASIC accepts Enforceable Undertaking over ‘one size fits all’ SMSF firm

ASIC has accepted an Enforceable Undertaking in relation to a firm using a ‘one size fits all’ SMSF advice model.

The regulator announced that it had accepted an Enforceable Undertaking (EU) from AIW Dealer Services Pty, which was the financial services licensee of Otium Advice Pty Ltd – a financial advice business based on the Sunshine Coast.

“ASIC’s surveillance found that Otium advisers had used a ‘one size fits all’ advice model, advised clients to switch superannuation funds when it was inappropriate to do so and failed to demonstrate the ability, professional skills and knowledge required to competently provide financial product advice,” said ASIC.

“As a result, ASIC is concerned that AIW may have failed to take reasonable steps to ensure that its representatives complied with financial services laws, and that it did not have available adequate resources to provide financial services and to carry out supervisory arrangements.”

In November ASIC announced that it had banned Drew Grosskreutz, the primary financial adviser and CEO of Otium, from providing financial services for three years for advising clients to set up SMSFs to purchase property using Limited Recourse Borrowing Arrangements (LRBAs) “without considering if this was in their best interests”.

The EU says that ASIC is concerned that advisers connected with Otium, and acting in their capacity as authorised representatives of AIW, may have failed to:

  • act in the best interest of their clients;
  • provide financial product advice that was appropriate to their clients;
  • give priority to their clients interests;
  • provide adequate advice when recommending the replacement of one financial product with another

Under the EU, AIW acknowledges that the concerns are reasonable and will engage an independent expert to report on its policies and procedures.

Otium was a corporate authorised representative of AIW from November 2012 to September 2016.

ASIC acknowledged the cooperation of AIW.

Otium has been contacted for comment.

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