ASIC confirmed the variation, stating that the tribunal set aside its original decision and substituted a shorter banning period following Petrovic’s application for review. The ban now runs for three years from 15 January 2025, instead of the six years originally imposed by the regulator, according to ASIC.
ASIC first banned Petrovic in January last year after finding he had failed to meet core adviser obligations while working at UGC, a now-liquidated Melbourne-based licensee.
The regulator said Petrovic provided advice to clients to establish self-managed superannuation funds and invest heavily in the Global Capital Property Fund Limited, a related property investment vehicle that has since collapsed.
In its original banning decision, ASIC said Petrovic claimed to be providing limited or “execution-only” advice, but in practice compared clients’ existing superannuation arrangements with the proposed SMSF structure and made representations about potential returns.
ASIC found this conduct amounted to personal financial advice and that Petrovic failed to act in clients’ best interests, failed to provide appropriate advice and issued defective statements of advice. ASIC also alleged some statements made to clients were misleading.
According to ASIC, the tribunal upheld its findings that Petrovic contravened the law but ultimately determined that the six-year banning period was excessive in the circumstances. ASIC said the tribunal considered the seriousness of the conduct, Petrovic’s role within the business and the need for both deterrence and proportionality when determining the appropriate sanction.
Further detail on the tribunal’s reasoning was outlined by law firm Mackay Chapman, which represented Petrovic in the review proceedings. The firm said the tribunal accepted that there was no finding of dishonesty, fraud or personal enrichment on Petrovic’s part, and that his conduct occurred within a business model designed and controlled by others at UGC.
Mackay Chapman said the tribunal also took into account Petrovic’s previously unblemished compliance history and the fact that he was not responsible for designing the advice model or promoting the Global Capital Property Fund at a corporate level. The firm said the decision reflects a more proportionate approach to individual accountability, particularly where advisers are operating within flawed licensee structures.
The case sits within a broader enforcement program by ASIC targeting conflicted SMSF advice and vertically integrated property investment schemes. ASIC has repeatedly warned consumers about high-pressure SMSF strategies and has pursued a number of banning orders against advisers and directors associated with UGC.
ASIC separately banned UGC director Joel Hewish for 10 years, a decision that was upheld by the tribunal last year. ASIC said the variation of Petrovic’s ban does not change its underlying findings or its broader concerns about the conduct that occurred at UGC.
