In July 2024, the Australian Securities and Investments Commission (ASIC) announced it had banned Joel Hewish from providing financial services, performing any function involved in carrying on a financial services business, and controlling an entity that carries on a financial services business for 10 years.
At the time, it was stated he had applied to the ART for a review of this decision, and an outcome of this was handed down on 4 August, which upheld the decision.
However, he may still seek a further appeal in the Federal Court or a referral from the president of the tribunal to the tribunal’s guidance and appeals panel.
Hewish became a director of UGC on 8 November 2011 and had been the key person on the licence since 18 August 2017. In July 2024, UGC entered into voluntary administration, and related property investment company Global Capital Property Fund (GCPF), which was an authorised representative of UGC, was ordered to be wound up in October 2024.
ASIC found that UGC’s authorised representatives contacted prospective clients and recommended they establish a self-managed superannuation fund (SMSF), rollover their existing superannuation into the SMSF, and invest it in highly speculative investments related to Hewish.
Hewish was banned as ASIC found that he:
- Was involved in UGC’s conduct as its responsible manager and key person under the licence.
- Demonstrated a fundamental lack of competence and a cavalier attitude to his management of UGC and the importance of complying with financial services laws.
- Created a culture of non-compliance and incompetence at UGC.
- Cannot be trusted to comply with financial services laws.
ASIC’s investigation into the conduct of UGC, Hewish, and related entities is continuing.
UGC was required to remain a member of the Australian Financial Complaints Authority (AFCA) until 31 May 2025 and is no longer able to accept complaints about the product. By the deadline, almost 700 complaints had been received and many of these would be processed in 2026–27.
According to the revised estimate, the Compensation Scheme of Last Resort (CSLR) will pay 292 determinations related to UGC in FY2025–26 for a total cost of $37.37 million, down from 307 determinations and a cost of $44.57 million.
Due to the size of the investments in UGC, the majority of which exceeded the CSLR’s compensation cap of $150,000, the initial report put the estimated average outcome amount at $145,000. However, lower-than-expected claim amounts have seen this reduced to $128,000 per determination.
Coupled with the higher number of complaints that AFCA won’t get through in FY25–26, the CSLR has estimated the future impact of UGC is now going to hit $26.77 million – meaning UGC will cost advisers a total of $64.14 million, based on the latest estimate.
GCPF was a profitable and solvent investment vehicle with almost $20m or 20% of its NAV in cash at time of freezing orders. The investment only lost money because the freezing orders prevented projects in construction from being finished. Everyone should take a closer look at what happened. Check out the publicly available financials.
What about the poor clients who are caught up in First Guardian but either couldn’t get a complaint in on time or were unaware of their losses until after 31 May as First Guardian only went into liquidation in April.
We now have no recourse for an AFCA determination and therefore no CSLR payout if the UGC membership had been extended when First Guardian went into liquidation these figures would be much higher.