The Administrative Appeals Tribunal has upheld ASIC’s decision to refuse a financial services licence to a Victorian wealth advice firm, after the regulator discovered its director had taken a personal loan from a client.
In a statement, ASIC said the AAT had upheld its decision to refuse a licence to Allegra Financial Services Pty Ltd – a private company registered in Victoria and trading as Allegra Private Wealth – on 30 November.
The tribunal found that its director, responsible manager and sole shareholder Lachlan Schonfelder had "engaged in conduct such that it could not be satisfied that Allegra would provide financial services efficiently, honestly and fairly".
"The lack of candour in Mr Schonfelder’s dealings with ASIC also raised serious doubts in the AAT’s mind as to whether Allegra would be able to deal honestly," the regulator said.
ASIC added that Mr Schonfelder had not disclosed when applying for a licence for his firm that he had been terminated from another licensee for taking a personal loan from a client.
"Allegra failed to disclose this in its application and Mr Schonfelder provided misleading information to ASIC regarding the reasons that he ceased employment with the licensee," the regulator said.
ASIC commissioner Danielle Press said the decision was a reminder that licence applicants must provide full and frank disclosure to ASIC around their past dealings.
"The decision reinforces the recent licensing reforms under the Financial Sector Reform (Hayne Royal Commission Response—Stronger Regulators [2019 Measures]) Act 2020 which provide that ASIC must not grant a licence unless it has no reason to believe a controller, officer or senior manager is not a fit and proper person to provide financial services, or perform one or more functions as an officer of the applicant if a licence was granted," Ms Press said.
"The character of these persons remains a critical aspect of ASIC’s licensing assessment."
Mr Schonfelder had argued at the hearing that he had engaged a third party to assist in compliance arrangements for the firm, but the tribunal dismissed this argument, saying that "the arrangements described to us are not an adequate or appropriate response to the problems we have identified".
Mr Schonfelder appears on the ASIC register as a current authorised representative of Havana Financial Services, and was previously employed by Carnbrea & Co and MW Planning.
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