On Feb. 29, the Federal Court concluded that RM Capital did not adequately ensure its authorised representative, SMSF Club, refrained from accepting conflicted remuneration.
The verdict comes after ASIC’s allegations that SMSF Club advised clients to purchase real estate through self-managed superannuation funds (SMSFs), benefiting from referral payments made by Positive RealEstate, the regulator said.
ASIC argued that from December 2013 to July 2016, SMSF Club received approximately $5,000 from Positive RealEstate for each property sold to its clients via SMSFs. This practice, according to ASIC, contravened sections 963G and 963F of the Corporations Act, pertaining to the acceptance of conflicted remuneration by an authorised representative and the failure of an Australian financial services licensee to prevent such acceptance, respectively.
The case is now adjourned as the court deliberates on the appropriate relief against RM Capital and orders concerning SMSF Club. A mention has been scheduled for March 7 to discuss these matters further.
Under the Corporations Act, financial services licensees are required to ensure their representatives avoid conflicted remuneration, defined as any benefit that could influence the financial product advice given to clients.
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