ASIC cancels AFSL over failures with licensee obligations
Following earlier breaches relating to superannuation and insurance advice in 2017, ASIC has cancelled the licence of a Melbourne advice firm for failing to comply with its general licensee obligations.
In a public update, ASIC said it has cancelled the Australian financial services (AFS) licence of Melbourne-based financial services provider Golden Financial Group Pty Ltd, following a period of suspension from 18 March 2019.
ASIC said it was concerned that Golden Financial was not complying with its general licensee obligations.
“Golden Financial failed to lodge its annual financial reports and did not have membership of an external dispute resolution system,” ASIC said.
In response to ASIC’s concerns, Golden Financial advised ASIC that it had ceased its financial services business and requested the cancellation of its AFS licence.
ASIC previously took action against Golden Financial Group, previously known as NSG Services Pty Ltd, in 2017 for breaching the best interests duty.
The Federal Court imposed a $1 million civil penalty against the firm for breaches relating to advice that was provided to clients on eight occasions between July 2013 and August 2015.
It was the first civil penalty imposed on a financial services licensee for breaches of the best interests duty.
The $1 million penalty related to financial advice provided to clients by NSG advisers on eight occasions between July 2013 and August 2015.
“The clients were commonly sold insurance and advised to roll over superannuation accounts that committed them to costly, unsuitable and unnecessary financial arrangements,” ASIC said.
The court found that the failures by NSG to ensure compliance by its representatives were systemic in nature.
It found that NSG’s representatives breached section 961B of the Corporations Act by failing to take reasonable steps to ensure that they provided advice that complied with the best interests obligations, and section 961G of the act by failing to take reasonable steps to ensure that they provided advice that was appropriate to its clients.
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.