Determination - 4 December 2014

Key issues: Financial advice | Financial adviser | Inappropriate advice | Geared investments | Self-managed superannuation fund | Tax treatment of compensation
Summary of Determination

  1. I find that the consumers’ complaint against the FSP has been made out; in particular:
    1. Ms W, an authorised representative of the FSP (the Representative), did not have a reasonable basis for the advice provided to the consumers regarding their geared investment portfolio;
       
    2. the Representative provided advice to the consumers to establish a self managed superannuation fund (SMSF), but did not have a reasonable basis for doing so;
       
    3.  the Representative provided advice to the trustee of the SMSFregarding the investments of the SMSF, but did not have a reasonable basis for doing so; and
       
    4. as result of relying on this advice, both the consumers and theSMSF trustee have suffered loss.
       
  2.  In order to compensate the consumers and the SMSF trustee for the loss they have suffered as a result of the Representative’s conduct, I order the FSP pay:

    1. the consumers the sum of $280,000; and
       
    2. the SMSF trustee the sum of $53,303.
       
Follow this link for a full copy in PDF >>  Determination | 4 December 2014