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ASIC cancels licence of SMSF advice firm
An SMSF advice firm has had its licence cancelled after failing to maintain external dispute membership with AFCA.
In a public statement, ASIC said it has cancelled the Australian Financial Services Licence (AFSL) of CMH Financial Group Pty Ltd (CMH Financial Group) due to its failure to maintain external dispute resolution membership with AFCA.
In addition, CMH Financial Group also failed to lodge its profit and loss statements and balance sheets for the financial years ended 30 June 2019, 30 June 2020, and 30 June 2021, according to the corporate regulator.
The cancellation took effect on 25 August 2022.
ASIC said that under the Corporations Act, ASIC may suspend or cancel an AFSL if a licensee fails to meet its general obligations under s912A.
“This includes the obligation to hold membership of a dispute resolution system and lodge financial statements annually with ASIC,” it stated.
CMH Financial Group can apply to the Administrative Appeals Tribunal (AAT) for a review of ASIC’s decision.
ASIC previously accepted an enforceable undertaking from the self-licensed advice firm and its director back in 2016.
In a statement released in March 2016, ASIC stated that its surveillance had found that the firm had failed to provide appropriate SMSF advice.
The corporate regulator said at the time that CMH Financial Group and its sole director had not demonstrated that the advice provided was in clients’ best interests and did not comply with product replacement advice disclosure obligations.
The advice included establishing SMSFs where the starting balances were below $200,000, which in ASIC's view, taking into account the impact of CMH's fees, was not in the best interests of clients.
In response to ASIC's concerns, CMH Financial Group appointed an independent expert to undertake a program of pre-vet and audit reviews to test the compliance of SMSF advice prepared on behalf of CMH Financial Group.
Existing representatives of CMH Financial Group also enrolled in and completed SMSF specialist training courses under the conditions of the EU.
In the statement issued this week, ASIC also stated that it had also cancelled the AFSL of James B Cogan.
The licence was cancelled because Mr Cogan is no longer carrying on a financial services business, ASIC said.
ASIC may cancel an AFSL held by an individual if the person ceases to carry on a financial services business.
Miranda Brownlee
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.
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