ASIC cancels AFS licence of The Australian Dealer Group
The Australian Securities and Investments Commission (ASIC) today announces the cancellation of the Australian Financial Services (AFS) licence of The Australian Dealer Group (ADG).
The decision reflects findings that ADG’s business model was not designed to comply with its obligation to act efficiently, honestly or fairly when providing financial services. ADG was found to have:
- prioritised its own interests over the consumers’ interests;
- breached the Australian Tax Office’s (ATO’s) terms and conditions when conducting lost superannuation searches;
- acted without the consent or instruction of consumers;
- charged fees for superannuation consolidation on an ad hoc basis, without transparency, fairness or consistency; and
- pressured consumers into signing Superannuation Consolidation Agreements over the phone, including by not providing time to read its terms and conditions prior to seeking agreement.
ASIC believes that due to ADG’s conduct, consumers were potentially exposed to harm, including loss of insurance held through superannuation, extra fees and ATO penalties for inappropriate access to superannuation.
Also today, ASIC said it had permanently banned Mr Nizi Bhandari from providing financial services and engaging in credit activities, controlling a financial services or credit business, or performing any function in relation to carrying on a financial services or credit business.
Mr Bhandari was an authorised representative of ADG between November 2017 and December 2020. For the same period, Mr Bhandari was the sole director, responsible manager and key person under ADG’s AFS licence.
ASIC found that Mr Bhandari acted dishonestly while assisting consumers to find and consolidate their superannuation and obtain hardship payments. This included instances where Mr Bhandari told consumers to make false statements to their superannuation fund trustees in order to gain early access to their superannuation balances.
The regulator also found that Mr Bhandari and ADG, through Mr Bhandari, gave personal advice to consumers about their superannuation despite only being authorised to give general advice. As a result, Mr Bhandari and ADG failed to comply with the legal obligations required when giving personal advice, such as acting in the client’s best interests and providing a statement of advice. By engaging in this conduct, Mr Bhandari and ADG were involved in multiple contraventions of financial services laws.
Mr Bhandari and ADG have the right to appeal to the Administrative Appeals Tribunal for a review of ASIC’s decisions.