ASIC accepts enforceable undertaking from Ascentiv Group relating to SMSF advice

ASIC has accepted an enforceable undertaking from Ascentiv Group Pty Ltd, based in Mascot, New South Wales, and its sole director, Mr Chris Pappas.

An ASIC surveillance of Ascentiv, the holder of an Australian financial services (AFS) licence, found concerns about Ascentiv's advice to clients to establish or use a self-managed superannuation fund (SMSF).

In particular, ASIC had concerns about Ascentiv's failure to:

• ensure its representatives provide SMSF advice that was appropriate and in the best interests of their clients
• adequately manage conflicts of interest
• adequately monitor and supervise its representatives, and
• ensure its representatives were adequately trained and competent to provide SMSF advice.

According to ASIC, surveillance also found that Ascentiv failed to provide its clients with clear and concise statements of advice.

"Instead the statements of advice were very lengthy and difficult to understand, making it difficult for Ascentiv's clients to make informed decisions about the advice provided to them," ASIC said.

"Under the EU, Ascentiv has agreed to cancel its AFS licence and write to some of its existing clients to inform them of the EU and the clients' rights to dispute resolution."

Mr Pappas has also undertaken to:

• give a copy of the EU to any AFS licensee that authorises him to provide financial services in the future;
• complete further SMSF specialist training before becoming a representative of an AFS licensee; and
• refrain from becoming an AFS licensee or office holder of an AFS licensee for two years.

ASIC Deputy Chairman, Peter Kell said elf-managed super funds are not appropriate for everyone. It is important that the advice provided to clients of financial advisers is appropriate for those individuals' needs and circumstances.

'ASIC further expects that AFS licensees that provide SMSF advice to adequately monitor their representatives and have processes which lead to the provision of high quality SMSF advice," he said.

"ASIC will intervene where it finds the quality of advice provided by advisers and the supervision of those advisers by the licensee to be lacking."

ASIC acknowledges Ascentiv and Mr Pappas' cooperation throughout the process.