ASIC has accepted an Enforceable Undertaking from a Gold Coast accountant preventing her from providing financial services for three years, following an investigation into SMSF advice involving property.
The regulator says it found Jenan Oslem Thorne (also known as Cenan Thorne or Cenan Dikmen) had “failed to act in the best interests of her clients and had prioritised her own interests above their interests”.
ASIC says it started to review the advice given by Mrs Thorne after finding that she was receiving referrals to establish SMSFs from Park Trent Properties Group Pty Ltd. In 2015 the Supreme Court of NSW found that Park Trent had been carrying on an unlicensed financial services business – advising clients to buy investment property through SMSFs – and handed down a permanent injunction restraining the company from providing unlicensed financial advice to clients around SMSFs.
In relation to Mrs Throne, ASIC reviewed advice she gave as a representative of SMSF Advice Pty Ltd – a wholly owned subsidiary of AMP Limited.
“ASIC found that Mrs Thorne hadn’t properly considered her clients’ existing superannuation arrangements or explored why they were interested in investing in direct residential property through an SMSF. When recommending SMSFs to some of her clients, she had inappropriately scoped advice by excluding insurance and retirement planning,” said ASIC.
“ASIC also found that Mrs Thorne did not adequately stress-test SMSF strategies and had recommended SMSFs to some of her clients despite inadequate evidence to suggest that the strategies would provide increased retirement benefits.”
“Furthermore, Mrs Thorne had recommended that her accountancy practice, Saber Accountants Pty Ltd, prepare the annual accounts and tax returns for the SMSF clients. This led ASIC to determine that Mrs Thorne recommended the services of a related party to create extra revenue for herself.”
ASIC says advisors should “critically probe” why a client wants to set up an SMSF before recommending an SMSF.
“Financial advisers have a legal obligation to provide advice that is in the best interests of their clients, not prioritise their own interests or simply implement client instructions,” said ASIC Commissioner Danielle Press.
“ASIC will continue to take action when advisers or AFS licensees don’t comply with the law,” she said.
“Consumers need to know that managing your own super is a major commitment that can be expensive and involve significant time and effort. SMSFs are not for everyone. Consumers should consider their personal circumstances carefully before deciding to establish an SMSF.”