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A Queensland-based brokerage and financial planning company has agreed to cancel its Australian Financial Services licence and for its sole director to remove himself from industry for two years, following ASIC’s concerns over conduct.
The Australian Securities and Investments Commission (ASIC) has accepted an enforceable undertaking (EU) from Breakaway Finance Group Pty Ltd (Breakaway), a Queensland-based brokerage and finance group that writes home loans, investment loans and asset finance, among other services.
Following an ASIC surveillance into Breakaway and its advisers, ASIC said that it had concerns regarding both the conduct of Breakaway as an AFS licensee and of its director - broker and MFAA member Mark Roberts - as an adviser.
In particular, ASIC had concerns that Breakaway:
- did not sufficiently tailor several key policies and procedures to its operations, thus failing to ensure compliance with relevant laws;
- did not effectively deal with conflicts of interest;
- did not properly implement or follow some key policies.
In addition, ASIC had concerns that Mr Roberts:
- failed to make reasonable inquiries into the clients’ relevant circumstances prior to providing advice;
- recommended insurance cover where clients were unable to afford the premiums;
- failed to provide adequate product replacement disclosure when recommending clients to switch products.
Breakaway and Mr Roberts have acknowledged that ASIC’s views are reasonably held and have offered to have their AFS licence cancelled as part of the EU as well as write to relevant clients who have received advice over the last three years to inform them of the EU and of their rights to raise a complaint.
Further, Mr Roberts has agreed to not provide financial services for a period of two years; not act as a director, secretary, shareholder, employee, responsible manager or any other officers of an AFS licensee or authorised representative for two years; and notify ASIC and complete the relevant training and education requirements in advance of re-entering the financial services industry.
Mr Roberts’s exclusion will be recorded on ASIC’s Financial Advisers Register.
ASIC acknowledged the cooperation of both Breakaway and Mr Roberts during the surveillance.
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