ASIC claims conflicted remuneration win on real estate payments
The Australian Securities and Investments Commission (ASIC) has succeeded in taking a conflicted remuneration case against a financial advice licensee over conflicted remuneration.
The regulator has announced that the Federal Court has found that the licensee, RM Capital had failed to take reasonable steps to ensure that its authorised representative, the SMSF Club Pty Ltd did not accept conflicted remuneration.
ASIC alleged that the SMSF Club advised its clients to set up self-managed superannuation funds (SMSFs) to buy real property marketed by real estate agent, Positive RealEstate Pty Ltd.
ASIC alleged that between December 2013 and July 2016 and pursuant to referral agreements, Positive RealEstate paid SMSF Club around $5,000 each time a client bought a property through them using their SMSF.
ASIC contended that SMSF Club contravened s963G of the Corporations Act by accepting payments from Positive RealEstate, and RM Capital contravened s963F of the Corporations Act by failing to take reasonable steps to ensure SMSF Club did not accept the payments.
The Court adjourned the proceeding to consider (a) relief that should ordered against RM Capital and (b) orders to be made in relation to SMSF Club.
ASIC alleged that between December 2013 and July 2016 and pursuant to referral agreements, Positive RealEstate paid SMSF Club around $5,000 each time a client bought a property through them using their SMSF.
Fair enough; but this was the best part of ten years ago. ASIC ringing every last drop of blood out of the legacy issues.
Yes, it makes you wonder if ASIC has decided to respond to mounting pressure about their policy of persecuting the innocent rather than prosecuting the guilty, by pulling out an old neglected case from the bottom drawer. This is more about protecting ASIC than protecting consumers.
On behalf of legitimate financial planners everywhere, I have no beef with ASIC on this one – other than it was 10 years ago!
Agreed most Advisers would not want this conduct.
The question for ASIC is now that Industry Super are the biggest receivers ever of Super Commissions,
the worst Commissions as they are Hidden and can’t be opted out of, charged to every member when most members are paying Hidden Commissions for NO SERVICE.
But hey that’s All good as Industry Super get a special carve out.
And also want to massively increase this carve out and scope of conflicted Sales Advice = Massive increase in HIDDEN COMMISSIONS TO INDUSTRY SUPER.
ASIC & Industry Super Regulatory Capture Corruption is a massive disgrace that only grows bigger every year.
PS – Oops sorry aren’t Hidden Commissions now called Collective Charges. Nice twist of words hey to avoid the dreaded evil word COMMISSIONS.