The Financial Service and Credit Panel was convened by ASIC on 30 July 2024 under s139(1) of the Australian Securities and Investments Commission Act 2001 to consider the conduct of relevant provider (the Sitting Panel) reasonably believes that has contravened the following financial services laws under the Corporations Act 2001 (Corporations Act):
(a) s961B(1) of the Corporations Act;
(b) s961G of the Corporations Act; and
(c) 921E(3) of the Corporations Act in relation to advice given to a client in July 2022, pursuant to s921T(1)(b) of the Corporations Act.
The FSCP said the provider gave advice in June 2022, recommending a client make a superannuation non-concessional contribution of $145,000 for the 2022–23 financial year.
When giving the advice, the relevant provider failed to take into account that the client had previously received advice in February 2021, by another adviser authorised by the same AFS licensee as the relevant provider, which recommended the client make a lump sum NCC of $299,000 in the 2020-21 financial year. That triggered a “bring-forward arrangement” which reduced the client’s NCC cap to $1,000 for the next two financial years.
As a result of following the advice, the client was notified by the ATO in September 2023 that she needed to withdraw $157,117.14 from her superannuation and that her 2022-23 income tax assessment would be amended to include her associated earnings amount of $17,134.
The Sitting Panel believed that the relevant provider contravened sections 961B(1), 961G and 921E(3), specifically, they did not demonstrate compliance with the Code of Ethics’ value of diligence and breached Standard 5.
