ASIC obtains compliance orders for SMSF accountant

She first entered into a CEU with ASIC on 13 February 2019, following an ASIC investigation that found she failed to act in her clients’ best interests and that she prioritised her own interests above those of her clients.

On 17 November 2020, ASIC commenced civil proceedings against Ms Thorne, alleging that she took deliberate steps to avoid compliance with the CEU.

After ASIC filed these proceedings, Ms Thorne agreed to orders requiring compliance with the CEU.

The court also ordered that Ms Thorne correspond with relevant consumers to provide them with information regarding the CEU and to notify ASIC of her compliance with the orders.

“In my view, in light of the evidence before the court, it is clear that Ms Thorne did not comply with the EU, and that the power of the court to make orders pursuant to s 93AA(4)(a) of the ASIC Act is enlivened,” Justice Berna Collier said.

“Further, there is no evidence before me that Ms Thorne used her best endeavours to comply with the undertaking.

“Rather, such evidence as is before me suggests that Ms Thorne deliberately sought to avoid proper compliance with the terms of her EU by obfuscation in respect of such information as she provided to clients, and in respect of her apparent endeavours to prevent communications actually reaching clients.”

ASIC commissioner Danielle Press said ASIC first took action in this matter “because the law requires that financial advisers act in their clients’ best interests”. 

“Those providing financial services must not prioritise their own interests or simply implement client instructions,” Ms Press said.

“Individuals and organisations entering into court-enforceable undertakings with ASIC have binding obligations that must be met to ensure compliance. ASIC will not hesitate to take action against those who don’t comply with their obligations.”

The court also ordered that Ms Thorne pay $16,529.78 for ASIC’s costs of the proceeding.

ASIC accepted a court-enforceable undertaking from Ms Thorne in February last year after it found she had failed to act in the best interests of her clients and had prioritised her own interests above their interests.

Ms Thorne’s advice was reviewed by ASIC during its investigation into Park Trent Properties Group Pty Ltd. ASIC claims that Ms Thorne was receiving referrals from Park Trent to establish SMSFs.

ASIC reviewed advice provided by Ms Thorne when she was a representative of SMSF Advice Pty Ltd, a wholly owned subsidiary of AMP Ltd, and concluded that she had advised some of her clients to establish SMSFs without taking their circumstances into account.

The regulator found that Ms 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.

ASIC also found that Ms 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, Ms 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 Ms Thorne recommended the services of a related party to create extra revenue for herself.

As part of the EU, Ms Thorne had agreed to inform all her former personal advice clients about the EU and provide contact details of her former licensee, SMSF Advice Pty Ltd.