ASIC has banned a Gold Coast adviser from providing financial services for five years after clients were found to have been placed in a vulnerable financial position as a result of his advice.
According to ASIC's investigation, Daniel John Rennebergfailed to act in the best interests of clients, including advising them to set up self-managed super funds with "completely unsuitable" limited recourse loans.
The corporate regulator's investigation into Renneberg's tenure at Austplan showed he received referrals from GM Homes Australia to help their clients purchase investment properties. Following this, he advised clients to set up SMSFs with limited recourse loan arrangements that "were completely unsuitable and placed his clients in a vulnerable financial position", the regulator found.
He has advised some clients to set up SMSFs with limited recourse borrowing arrangements that were completely unsuitable and placed his clients in a vulnerable financial position"
"He has advised some clients to set up SMSFs with limited recourse borrowing arrangements that were completely unsuitable and placed his clients in a vulnerable financial position," 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.
Additionally, ASIC found other deficiencies in the financial services provided by Austplan's representatives and was concerned about the firm's ability to do all things necessary to ensure the advice provided by its representatives complied with the law.
Renneberg was an authorised representative of Austplan, between March 2015 and June 2018, and its sole director when Austplan's licence was cancelled.