ASIC reviewed the advice Daniel John Renneberg had provided to 15 of his clients while he was an authorised representative of Austplan. On reviewing the files, ASIC found that Mr Renneberg received referrals from GM Homes Australia to help its clients establish self-managed superannuation funds (SMSFs) to purchase an investment property.
ASIC found that Mr Renneberg had not provided the clients appropriate financial advice or acted in their best interests. He had advised some clients to set up SMSFs with limited recourse loan arrangements that were completely unsuitable and placed his clients in a vulnerable financial position.
“Mr Renneberg completely failed to consider his clients’ needs, objectives and circumstances. Mr Renneberg also failed to give his clients statements of advice that set out the advice he provided and the information on which he based his advice,” ASIC said.
ASIC commissioner Danielle Press said SMSFs are not for everyone and using an SMSF to borrow money and buy a property is a high-risk strategy.
“ASIC will be looking very carefully at advisers who recommend this strategy and taking swift action where we see problems,” she said.
“Financial advisers must not rely solely on client direction when establishing an SMSF. They must adequately demonstrate why an SMSF is appropriate and why it is in their clients’ best interests.
“ASIC expects financial advisers to use their skills, expertise and judgement in determining whether an SMSF is indeed appropriate for their clients’ personal circumstances and needs.”
Mr Renneberg was an authorised representative of Austplan (from 1 March 2015 to 5 June 2018) and its sole director when Austplan’s AFS licence was cancelled.
He was previously an authorised representative of Professional Investment Services (from 11 April 2006 to 14 May 2010).
This is good market surveillance by ASIC . No entrapment provided they publicize the results each year to us as advisors and the issues they have found so that we can all work together .Same questions to Industry funds that offer a SMSF option . This, however ,will never happen because we have a body in canberra that refuses to talk to advisers .
I have had a shadow shopper trying to bait me into providing property advice via SMSFs. How did I know – despite repeated requests for this person to complete a factfind, they wouldn’t do it. But they did follow me up on 4 occasions, raising the topic of property and SMSFs. This is a form of entrapment.
It is the practices described in this article that reduce the regulator’s trust in us and make it harder for all of us.
Are you kidding?? These planners using cookie cutter approaches to clients while taking massive backhanders from property developers are the exact reason the rest of us are getting shafted! Do you remember Storm Financial or you have you not been around that long?
[quote=Just because ASIC said it, doe]This was a decent, educated and experienced planner. These assertions ASIC make about judgement are subjective and not objective. They’ve formed an opinion – but have no burden of proof.
The planner would be in a much better position than an ASIC solicitor to know what was in the clients’ best interests.
This is not a case of being rid of a bad seed. Advice has lost a good person.[/quote][quote=Just because ASIC said it, doe]This was a decent, educated and experienced planner. These assertions ASIC make about judgement are subjective and not objective. They’ve formed an opinion – but have no burden of proof.
The planner would be in a much better position than an ASIC solicitor to know what was in the clients’ best interests.
This is not a case of being rid of a bad seed. Advice has lost a good person.[/quote]
Licensed advisers who deal in SMSFs are just asking for trouble. The union funds have identified SMSFs as their next big target and will be using their influence over ASIC to prosecute their agenda. We all know most SMSF recommendations are made (illegally) by accountants. But accountants have immunity as far as ASIC is concerned. So it will be licensed advisers who cop it.
Yet GM Homes are still operating and only last year were appearing at seminars as “Retirement Experts”. ASIC again do not actually address the issue but throw a sacrificial lamb under the bus. My understanding was that the majority of the SMSF’s were being done via a female accountant for years so I am also assuming she had no action taken against her showing why an accountant dealing in SMSF’s is an idiot for getting licensed.
“ASIC commissioner Danielle Press said SMSFs are not for everyone and using an SMSF to borrow money and buy a property is a high-risk strategy.”
When I last looked – at the time the advice was given the property market was doing pretty well. Over 72 years averaging 8-9 percent depending on which state or territory you look at. Also, when I last looked property was a pretty long term commitment not a short term myopic view like the once expressed here by ASIC….they should really step aside and let the professionals handle this -they have done enough damage already….
Presumably Ms Press did not save a deposit and then borrow to buy her home.
Presumably Ms Press has not borrowed to buy an investment property.
Presumably Ms Press is not aware at the time the SOAs were prepared by Mr Renneberg residential property was the highest performing asset class over the preceding 20 years.
Presumably ASIC will now ask the Reserve Bank to advise all aspirant home owners that saving a deposit and borrowing to buy a home is not a strategy that suits every one and is high risk….
Presumably Ms Press is not much of an investor and is not experienced in the matters she opines on.
No idea whether this guy was acting appropriately or not (although accepting referrals from the property seller sounds awful). But did the Commissioner really make the blanket statement that using an SMSF to borrow money and buy property is a high risk strategy? What if there is 80% equity? 50% equity? Your own business as the tenant? We should expect ASIC to exercise “their skills, expertise and judgement” and not make one size fits all statements. After all, who paid cash for the house they live in? We can’t all be high risk investors.
“completely unsuitable and placed his clients in a vulnerable financial position”
“completely failed to consider his clients’ needs, objectives and circumstances”
Financial advisers must not rely solely on client direction when establishing an SMSF….
enough said..
Should the Title say, Queensland Accountant cops 5 year ban?
The white shoe brigade gets hit again. I am surprised with the number of advsiers banned in the gold coast over the last 5 years that there is any left !!! Just Joking .Good work ASIC but we all know that many advisers is/ are too close to the Property Spruikers , hence wake up . ASIC Ban any borrowings from Super funds full stop . Will only continue to lead to unnecessary risks and nearly always end in tears !!!! Anyone remember another white shoe brigade member STorm Financil Gear em up and hang on for the ride !! Ya wont make money unless you gear up ? go figure .. oh thats right , they had a cosy arrangement with the CBA express loan hotline… nothing to see here ASIC .
This was a decent, educated and experienced planner. These assertions ASIC make about judgement are subjective and not objective. They’ve formed an opinion – but have no burden of proof.
The planner would be in a much better position than an ASIC solicitor to know what was in the clients’ best interests.
This is not a case of being rid of a bad seed. Advice has lost a good person.
Cut his teeth at PIS. Surprise surprise.