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ASIC forms task force to investigate one-stop shops

by Nick Bendel10 minute read
The Adviser

ASIC has raised warnings about the conflicts of interest that can come with diversification following the multimillion-dollar collapse of a mortgage and financial services group.

At least four related entities of Charterhill Group entered insolvency in January, with an administrator then raising questions about millions of dollars of missing money.

The Adelaide-based group offered a range of services including mortgage broking, real estate marketing, property management, contract negotiation and SMSF advice.

Director George Nowak told clients in an emailed letter that Charterhill’s diversification strategy had led to its collapse.


ASIC commissioner Greg Tanzer raised concerns about “high-risk SMSF issues” when discussing Charterhill’s collapse in a speech earlier this week.

Mr Tanzer said Charterhill’s collapse had “raised a number of questions” about the one-stop shop strategy – and that ASIC had appointed a team to look at this business model.

“The purpose of the project team is to investigate the often complex business model structures of these operators and the risks to investors that this trend poses,” he said.

Mr Tanzer said the project team had identified that this model takes a ‘one-size-fits-all’ approach, with all investors receiving the same suite of products and services.

“The project team is also exploring whether commissions are being paid within these business models and whether these commissions are consistent with the restrictions on payment of commissions for advice under the FOFA reforms,” he said.

Mr Tanzer said that even when commissions were permitted, they still had to be clearly disclosed.

[Related: Charterhill director cops double blow]