The Supreme Court of Queensland has issued orders restraining a financial services firm and its sole director from carrying on a financial services business after it was found they advised clients to set up SMSFs without holding an Australian financial services licence (AFSL) or being authorised to do so.
An Australian Securities and Investments Commission (ASIC) investigation found Advanced Wealth Financial Services and its sole director and responsible decision-maker, Richard Gardner, advised clients to establish SMSFs to enable them to purchase investment properties, for which Gardner received substantial commissions.
ASIC said Gardner and Advanced Wealth are only licensed to provide credit services and are not authorised to provide financial services.
The corporate regulator began proceedings in the Supreme Court of Queensland against Advanced Wealth and Gardner on 14 December 2018.
At the time, it was seeking final orders to restrain Gardner and the firm from carrying on a financial services business unless authorised.
The court found between April 2016 and November 2018 both Advanced Wealth and Gardner, who was a former financial adviser, contravened section 911A of the Corporations Act 2001 by providing financial advice to clients to set up SMSFs for the purpose of investing in property without holding an AFSL.
In addition, the court determined Gardner as sole director and decision-maker for the business was knowingly concerned in Advanced Wealth’s contravention of section 911A of the Corporations Act between April 2016 and November 2018.
On 12 February this year, the court ordered Gardner and Advanced Wealth to pay ASIC’s costs of the application, fixed at $10,000.