ASIC bans former financial advisor over SMSF and property wrongdoing

ASIC bans former financial advisor over SMSF and property wrongdoing
ASIC bans former financial advisor over SMSF and property wrongdoing

ASIC has permanently banned former authorised representative Mr Nicholas Hunter from the financial services industry due to an investigation surrounding his conduct in advising self-managed superannuation fund (SMSF) clients.

ASIC found he had contravened financial services laws and is bankrupt. 

The investigation found he advised a number of SMSF clients to directly invest their SMSF in property during 2012. In doing so, he failed to make adequate inquiries into the clients' existing financial circumstances, including their existing SMSF portfolio and investment strategy, and did not give advice appropriate to the clients, according to ASIC.

ASIC investigations found he was selling properties on behalf of a Queensland property development company, MOGS Pty Ltd (in liquidation), and collecting commission of between $10,000 and $25,000 per sale. 

ASIC's investigation also found Mr Hunter:

  • was involved in the issue of falsified Westpac finance letters to MOGS to facilitate payment of his commissions
  • failed to issue the SMSF clients with Financial Services Guides and Statements of Advice
  • operated a financial services company website when not licensed or authorised
  • provided financial advice to several SMSF clients in 2012 when not licensed or authorised.

ASIC Commissioner Greg Tanzer said the matter involving Mr Hunter highlights ASIC's concerns about the potential for direct property advice though SMSF to constitute financial advice.

"Further, the advisor must act in the best interests of the client in giving that advice," he said.

ASIC's press release noted Hunter's "most recent recent appointment was with Spring Financial Group Pty Ltd between May 2011 and June 2012," which has been disputed by Spring over the alleged association.

The financial services company Spring FG Limited has noted the release by ASIC today, saying it had "resulted in media coverage that contains seriously incorrect information and implications."

"Resulting media coverage has implied or stated that Hunter was an employee of Spring FG subsidiary Spring Financial Group Pty Ltd (Spring Financial).

"At no stage was Hunter involved in the operation or conduct of any Spring FG business nor did he have any dealings with its clients."

Spring FG has sought to correct the record saying Hunter was never employed by Spring FG nor any subsidiary.

"Nick Hunter was an employee of and representative of an independent firm Murphy Dawson Partners.

"For a limited period from May 2011 to May 2012 Murphy Dawson held a corporate authorised representative arrangement with Spring Financial.

"Spring Financial unilaterally terminated that arrangement more than 3 years ago over concerns it held as to the conduct of Murphy Dawson. 

"Spring FG welcomes the banning order against Hunter."

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