ASIC has initiated court proceedings to stop a property promoter from providing unlicensed financial advice to SMSF investors.
The regulator began proceedings in the Supreme Court of New South Wales seeking interim and final orders to prevent property investment promoter Park Trent Properties Group Pty Ltd from carrying on an unlicensed financial services business.
Park Trent’s business promotes the use of SMSFs to purchase investment property, ASIC stated.
ASIC alleges and is seeking declarations that Park Trent is unlawfully carrying on a financial services business without an AFSL.
The regulator stated it understands that Park Trent has advised at least 500 members of the public to establish and switch funds into an SMSF, with the funds then used to purchase investment properties that are owned or promoted by Park Trent companies.
In addition, ASIC is seeking orders requiring Park Trent to notify current and former clients about the proceedings and to post a notice regarding ASIC’s proceedings on its website.
“Collectively, Australians hold over $1.85 trillion worth of assets in superannuation funds, with $557 billion held in SMSFs. It is important when making decisions regarding superannuation to consider obtaining appropriate advice from an authorised financial adviser,” said ASIC commissioner Greg Tanzer.
“Dealing with an authorised adviser affords specific protections under the law, such as acting in the best interests of clients, a duty to avoid conflicts of interest and providing access to dispute resolution schemes.”
The SMSF Professionals' Association of Australia (SPAA) issued a statement welcoming the move, with chief executive Andrea Slat6tery outlining that “SPAA has long been critical of property developers and property investment entities advising consumers to establish an SMSF to buy an investment property”.
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