The site included a page on the advantages of investing in property with a self-managed super fund, according to a statement from ASIC. The page compared the performance of a geared property investment within an SMSF with an ungeared equity investment within an SMSF, ASIC said.
The web page was promoted through the social media account of Omniwealth’s chief executive, who said that investing in property in an SMSF has taxation, leverage and diversification advantages, ASIC said.
The regulator was concerned that the web page did not offer a “balanced message” about the returns, benefits and risks of investing in property with an SMSF and that the uncertainty of forecasts was not clear.
“Making appropriate investment decisions is one of the most important responsibilities of SMSF trustees. ASIC is determined that SMSF trustees get accurate information and are not misled by advertising, including on websites and through social media,” said ASIC deputy chair Peter Kell.
Omniwealth has since removed the statements from its website and related social media accounts, ASIC said.
Speaking to ifa, chief executive office Matthew Kidd said the penalty came as a “massive surprise” for the Omniwealth team.
He said the firm has third-party compliance managers who had not picked up any forms of infringement and consider themselves “good corporate citizens of ASIC.”
Further, Mr Kidd said the firm wasn’t consulted before being hit with the fine.
“We put a detailed to submission to ASIC about why the fine should be reconsidered and we were knocked back. And we were disappointed because this was based on a potentially misleading claim, not actual misleading claim,” he said.
However, Mr Kidd stressed Omniwealth has been apologetic and has fully cooperated with ASIC.
and nightly I am bombarded by “wealth creator” property spruikers and not a problem in the world for them. ASIC are a joke, that ain’t funny!
Interesting ASIC! From what I can tell, The example was trying to show the effect of gearing so of course one asset was geared one not!
The time frame was 20 years so property and share returns highly likely to converge given same underlying economic forces at play
Ceteris Paribus principle of making comparisons DEMANDS you keep all variables the same bar the one you are demonstrating hence same growth rates for shares and property. rental incomes and interest rate could change. assumptions are explicitly revealed for the reader to freely make their own judgment. There is no attempt to pass off a geared investment as not, so the table is very explicit in showing one is geared one is not. There are a lot of investors who are prepared to gear into property but not shares/managed funds due to volatility and margin calls. So the example addresses exactly the question these people want answered. If someone does want to see the difference between one asset which is geared versus one that is not are we not to provide this? Seems very harsh to me!
WELL DONE ASIC! You deserve much praise and a big pat on the back for penalizing another retail advice business for writing some obscure bit of advertising that “may likely” mislead a poor vulnerable aussie battler.
This is another pathetic attempt to raise revenue and claim another scalp to justify their existence, thats all it is! We don’t see ASIC policing and cross-examining the ISN – but why would they when half of ASIC are ex-industry fund managers and labor supporters!
Omniwealth appears to be a multi services office so would feel comfortable referring clients for gearing strategies, where appropriate. Huge difference to the unlicensed property floggers. Let’s all go back to bland websites to keep ASIC and the lawyers happy as clearly the general advice warnings are no longer sufficient.
Ridiculous ASIC. Why the fine for such a petty thing? Given this action, ASIC management and staff should ALL be given equal sized fines for every time YOU failed to act when YOU should of in your day to day jobs.
Is this a bit of window dressing Asic? Picking the simple & easy cases for chest beating i think.
ASIC impose a fine on this organisation but they don’t impose penalties on the promoters of One Big Switch?
Perhaps they have conflicted loyalties?
Hmmm Sounds like the boys at ASIC needs a diversion-heads on poles
So prior consultation took place with ASIC via a third party compliance manager. Sack them now!
Compare and contrast this “be sneaky and carry a big stick ” approach for small AFSLs, with the “hail-fellow-well met ” approach to the banks many misdemeanours
Why is there absolutely no respect for ASIC ?
I agree that all information to the public should be balanced, however where is the balance in what the general media, politicians, and ASIC are distributing about the financial planning community? Sign our petition to help make them accountable for balance also:
https://www.communityrun.org/p…
Interesting – aren’t real estate agents lucky they don’t operate under AFSL rules !!!!!
Without wanting to necessarily comment on this case, I have seen many cases where people have been put into single geared properties in their SMSF. To me this is not a good strategy particularly when it is a residential property as it breaks all he basic rules of investing, particularly diversification. Some organisations are just “flogging” property investments for SMSF’s which in the current overheated capital city market is not without plenty of inherent risk.