ASIC has accepted an Enforceable Undertaking following concerns about the appropriateness of financial advice involving SMSFs.
“ASIC has accepted an enforceable undertaking (EU) from Ascentiv Group Pty Ltd (Ascentiv), based in Mascot, New South Wales, and its sole director, Mr Chris Pappas,” said an ASIC statement.
Surveillance by ASIC identified “concerns about the appropriateness of Ascentiv’s advice to clients to establish or use a self-managed superannuation fund (SMSF)”.
Some of ASIC’s concerns were that Ascentiv was failing to ensure its representatives provided SMSF advice that was appropriate and in the clients best interest, managing conflicts of interest and failing to ensure its representatives were “adequately trained and competent to provide SMSF advice”.
“ASIC’s surveillance also found that Ascentiv failed to provide its clients with clear and concise statements of advice. Instead the statements of advice were very lengthy and difficult to understand, making it difficult for Ascentiv’s clients to make informed decisions about the advice provided to them.”
Under the terms of the Enforceable Undertaking Ascentiv has agreed to cancel its AFS licence and contact some of it’s existing clients to inform them of the Undertaking and their rights to dispute resolution.
Mr Pappas has also agreed to give a copy of the Undertaking to any AFS licensee that authorises him to provide financial services in the future, complete SMSF specialist training before becoming the representative of an AFS licensee and to “refrain from becoming an AFS licensee or office holder of an AFS licensee for two years”.
“ASIC acknowledges Ascentiv and Mr Pappas’ cooperation throughout the process,” said the ASIC statement.
“Self-managed super funds are not appropriate for everyone. It is important that the advice provided to clients of financial advisers is appropriate for those individuals’ needs and circumstances,” said ASIC Deputy Chairman Peter Kell.
“ASIC further expects that AFS licensees that provide SMSF advice to adequately monitor their representatives and have processes which lead to the provision of high quality SMSF advice. ASIC will intervene where it finds the quality of advice provided by advisers and the supervision of those advisers by the licensee to be lacking,” he said.