Sydney firm loses AFSL, adviser banned
ASIC has cancelled the Australian Financial Services licence of a Sydney-based managed discretionary account (MDA) services provider, along with banning one of its directors from providing financial services.
Jade Capital Partners’ licence cancellation took effect on 11 January, with its director James Clinnick being banned for a period of four years.
The company was found to advertise misleading returns, fees and costs, performance history and results relating to MDA strategies, on its website and in a video presentation, which included 'back tested' returns.
ASIC found the advertised MDA returns were likely to mislead potential investors into believing the returns were based on actual returns when this was not the case.
Also found to be false were advertised fees and costs that could lead investors to think Jade Capital would only receive income if an investor made profits when, in fact, the company received transaction fees from trading on behalf of clients under an MDA arrangement
Furthermore, ASIC said claims about performance in the video presentation were also likely to mislead investors into thinking the MDA strategies managed by Jade Capital had been generating consistently good results.
“Licensees must not mislead consumers when marketing their services,” ASIC commissioner Danielle Press said.
“I also advise all consumers considering MDAs to evaluate the risks and benefits of an MDA.
“Consumers should ensure they have a good understanding of all the fees and charges, and carefully consider the scope of authority they are giving to their adviser.”
“Mr Clinnick was involved in Jade Capital's breach of a financial services law by engaging in misleading and deceptive conduct,” the regulator added.
Under the terms of the licence cancellation, Jade Capital can continue operations until 30 April to facilitate the termination of existing arrangements with clients.
The company has held its AFSL since 2012.
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