Director facing restrictions over lost superannuation advice
ASIC has accepted an enforceable undertaking from a director which will see him excluded from providing financial services for five years, after ASIC raised concerns about the advice his firm provided.
The corporate regulator has accepted an enforceable undertaking from director David Orth which will see him cease to provide financial services for five years.
“In addition, Mr Orth will make a community benefit payment in the amount of $400,000 to Financial Literacy Australia to support the financial capability of vulnerable people,” ASIC said in a public statement.
Mr Orth was the director of Real Wealth Pty Ltd and a responsible manager of Professional Representatives Pty Ltd.
Mr Orth has agreed that for the next five years he will cease to provide financial services, whether on his own, or on behalf of another person who carries on a financial services business, whether as an employee of that person or otherwise.
He also agreed that for the next five years he would not be a director of a financial services company that holds an Australian Financial Services Licence or a company that is a corporate authorised representative of an AFS licensee. He also said he would not hold an AFS licence for five years or apply for an AFS licence.
ASIC said that between May 2013 and December 2016 Mr Orth developed and caused Real Wealth to implement a business model under which it provided financial services to more than 750 clients.
In its investigations, ASIC said it found that representatives of Real Wealth would offer to assist clients in completing 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,” ASIC said.
“Further, Real Wealth did not conduct a reasonable investigation into alternate financial products which might achieve and meet clients' objectives and needs most.”
Real Wealth provided a 'general advice' warning, ASIC explained, but did not provide clients with statements of advice for the financial product advice that Real Wealth provided.
Real Wealth charged clients 4.4 per cent of the total balance of their superannuation balances, according to ASIC.