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Compliance & Regulation

ASIC accepts EU from SMSF advice provider

Ascentiv Group has provided the Australian Securities and Investments Commission (ASIC) with an enforceable undertaking (EU) in light of concerns over the appropriateness of advice provided to clients about the establishment and use of SMSFs.

ASIC surveillance found the activities of Ascentiv troublesome because the licensee failed to ensure the SMSF advice provided by its representatives was appropriate and in the clients’ best interests, failed to ensure its representatives were properly trained and competent to provide SMSF advice, failed to adequately manage conflicts of interest, and failed to adequately monitor and supervise its representatives.

The corporate regulator also found fault with Ascentiv’s statements of advice, finding them very lengthy and difficult to understand, in turn making it challenging for clients to make informed decisions about the advice provided to them.

Under the EU accepted by ASIC, Ascenitv has agreed to relinquish its Australian financial services licence (AFSL) and inform its clients of the undertaking and any dispute resolution processes available to them.

In addition, Ascentiv sole director Chris Pappas has given a commitment to forgo being an AFSL or office holder for two years, provide a copy of the EU to any licensee that authorises him to provide financial services in the future, and complete further SMSF training before becoming an authorised representative of another AFSL holder.

“Self-managed super funds are not appropriate for everyone. It is important that the advice provided to clients of financial advisers is appropriate for those individuals’ needs and circumstances,” ASIC deputy chair Peter Kell said.

“ASIC further expects that Australian financial services licensees that provide SMSF advice to adequately monitor their representatives and have processes which lead to the provision of high-quality SMSF advice.”

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