In September 2022, ASIC imposed a five-year ban covering the provision of financial services, functions involved in carrying on a financial services business, and control of such a business. Its findings concerned SMSF property advice, advice documents, the management of conflicts and conflicted remuneration.
I disagree with significant aspects of ASIC’s assessment of my financial advice and with the proportionality of the resulting sanction. I acknowledge that mistakes occurred in the documentation. However, that acknowledgment should not be read as agreement that I deliberately misled clients or knowingly acted against their interests.
The context matters. Establishing a self-managed superannuation fund and borrowing to acquire residential investment property was a legally permitted strategy at the time of the advice, subject to specific conditions. The dispute concerned whether the recommendations were appropriate for the clients involved and whether the associated advice, documentation and conflict-management obligations had been met.
At the heart of my disagreement were two connected issues: the assessment of clients’ best interests and the treatment of conflicts within an integrated business.
The advice and its supporting documentation
I believed the recommendations served my clients’ circumstances and objectives. My solicitor and I strongly disputed ASIC’s assessment of their suitability.
However, I acknowledge that insufficient documentation and file notes weakened my ability to demonstrate the reasoning behind those recommendations and weighed against me in ASIC’s assessment. SMSF property strategies carry extensive compliance requirements. The Statements of Advice under review averaged more than 100 pages. Despite that volume of documentation, some of the reasoning supporting my recommendations was not fully captured.
That was a significant shortcoming. A clear record needs to explain the client’s circumstances, the alternatives considered and the reasons for the recommendation (the client's preferences for a strategy on their own are not enough). Accepting deficiencies in that record does not mean I agree that the underlying advice was contrary to my clients’ best interests.
I recognise that the best-interests duty is a legal obligation. My disagreement concerns how it was applied to the advice under review.
Integrated services and conflicts of interest
My business brought financial advice, accounting, mortgage broking and property services together. I believed that coordination could provide practical benefits for clients. My position is that the relevant relationships and financial interests were fully disclosed, and that clients wanted access to those coordinated services.
Disclosure does not, by itself, resolve every conflict. Financial advice obligations also require clients’ interests to take priority. The disputed question was whether the conflicts could be appropriately managed in the circumstances, or whether I should have declined to provide the advice.
As I understood ASIC’s position, it considered the conflicts too substantial for the benefits of the integrated service to justify proceeding. My solicitor and I strongly disputed that assessment and the conclusion that I had placed my interests ahead of those of my clients.
At the time of the review, no client had complained about the advice under examination. I provided ASIC with evidence supporting my position that no client had been placed in a worse financial position or suffered a loss as a result of that advice. That does not, by itself, determine whether every regulatory obligation was satisfied, but it is relevant context for understanding my position.
ASIC’s public release records findings of misleading statements and omissions in advice documents. It does not state findings of fraud or misappropriation. I acknowledge mistakes and omissions in my advice documentation, but I did not intend to deceive my clients. My position remains that I acted in good faith.
The separate credit review
ASIC also undertook a substantive review of my credit activities during the same period. No action was taken against the credit licence held by my mortgage-broking business, and I continued as its responsible manager.
That outcome is important context. Australian credit licensing carries an ongoing requirement for relevant people managing the business to satisfy the “fit and proper person” test. This considers competence and personal suitability, including honesty, integrity, diligence and judgment, as well as the ability to manage relevant conflicts. ASIC can suspend or cancel a licence where the applicable fit-and-proper requirements are no longer met.
ASIC’s guidance explains the assessment and
its ongoing application.
My continued role therefore carried substantive regulatory responsibilities. I believe the outcome of that review should be considered alongside the separate findings concerning financial advice.
Why I did not continue the Tribunal review
I sought review of the financial-services decision through the Administrative Appeals Tribunal. In May 2023, the Tribunal refused my applications for a stay and confidentiality orders. That preliminary ruling did not determine the substantive merits of my challenge - it simply refused my attempt to dispute the matter confidentially.
I withdrew the substantive review application in May 2024. My anticipated legal costs exceeded $250,000, regardless of the outcome. Those costs, the unsuccessful attempt to maintain confidentiality and my decision not to return to Australian financial planning made continuing the challenge impractical.
Withdrawal left ASIC’s decision standing. It did not signify agreement with its conclusions.
I am prepared to discuss this history openly with prospective employers and professional partners. I ask that it be considered with the distinction between the regulator’s findings, the documentation mistakes I acknowledge, and the substantive conclusions I continue to dispute.
Background and regulatory context
The investigation began in late 2017 with a request for a single client file. It subsequently expanded to a further 24 files and more than 9,000 documents across my financial planning, accounting, mortgage broking and property businesses. The banning decision followed almost five years after the initial request.
During that period, the Australian financial services industry underwent substantial regulatory change. Following criticism during the Financial Services Royal Commission, ASIC committed to accelerating enforcement and pursuing more court action. Its stated approach included asking “why not litigate?” as the starting point for enforcement matters. This was an explicit response to pressure for stronger regulatory intervention.
ASIC’s response to the Royal Commission.
Scrutiny of SMSFs and vertical integration
SMSF advice and vertically integrated businesses received particular attention.
In its 2018 review of major financial institutions, ASIC acknowledged that vertical integration could deliver economies of scale and benefits for customers and institutions. It also identified significant concerns about conflicts involving recommendations for in-house products. The model itself was not prohibited; the focus was on how it operated and whether clients’ interests were protected.
ASIC’s review of vertically integrated institutions.
My business differed in scale and structure from the institutions examined, but it faced a related question: how could the benefits of coordinated services be delivered while appropriately managing the interests of the businesses providing them?
ASIC’s 2018 review examined 250 client files randomly selected using ATO data relating to recently established SMSFs. It reported that 91% of the files examined did not comply with the best-interests duty and related obligations. This was a finding about the selected review sample, not the entire advice industry. Nevertheless, it illustrates the breadth of ASIC’s concerns and the scrutiny surrounding this area of practice.
ASIC’s SMSF advice findings.
The political and institutional environment
Superannuation policy was also politically contested. Before the 2019 federal election, Labor proposed restoring a general prohibition on direct borrowing by superannuation funds, drawing on the Financial System Inquiry’s recommendation. The Coalition defended retaining SMSF borrowing arrangements. Advisers and clients were therefore using a legally available strategy whose future was the subject of political disagreement.
Contemporary reporting on the SMSF borrowing debate.
Industry funds, retail institutions and the SMSF sector represented different approaches to managing retirement savings. Decisions to establish an SMSF and transfer existing superannuation also moved assets away from the previous fund, giving the debate commercial as well as policy significance.
Trade unions and employer organisations had established roles in the governance of many industry funds. Proposed changes to those arrangements were themselves politically contentious: in 2017, the union movement publicly opposed government proposals to alter industry-fund governance.
Australian Unions’ contemporary statement.
These competing interests are relevant background. They do not establish that unions, financial institutions or political interests influenced ASIC’s decision in my case. My concern is whether the wider policy climate and enforcement priorities left sufficient room for a balanced assessment of the individual circumstances.
Deterrence and proportionality
ASIC has expressly identified deterrence as an enforcement objective. Its enforcement update for April to June 2023 stated that it actively targeted cases with “high deterrent value.” Enforcement was therefore intended, in part, to send a wider message to the industry.
ASIC’s enforcement update, Report 767.
That stated policy does not establish why my case was selected. It does explain my concern about the balance between setting an example and imposing a sanction proportionate to an individual’s conduct.
In my view, the outcome gave insufficient weight to the circumstances I have described: the intended benefits of the advice, the evidence I provided about client outcomes, the separate credit-review outcome, the distinction between inadequate records and intentional deceit, and my unblemeshed record of compliance breaches.
Consumer protection and rigorous professional standards are essential. So too are proportionality and a careful distinction between different forms of failure. My disagreement with ASIC’s decision rests on how those considerations were applied in my case.
