Apogee Financial Planning to Pay $163,000, Says AFCA

Complaint

Ms T brings this complaint in her personal capacity and in her capacity as the director of the corporate trustee of her self-managed superannuation fund, the W SMSF (the complainants).

Ms T says an advisor of Apogee Financial Planning Limited provided her with inappropriate personal financial advice in March 2017 to establish the W SMSF and roll over her existing superannuation funds into the W SMSF. She says this was for the purpose of investing in a property development syndicate. Ms T acted on the advice and invested $90,000 which was rolled over from existing superannuation funds to her SMSF. Unknown to Ms T, the advisor’s brothers were involved with the property syndicate, thus creating a conflict of interest.

Apogee Financial Planning denies the advisor recommended either that Ms T establish an SMSF or use it to invest in the property syndicate. It says the advisor only recommended the rollover of superannuation which was appropriate to achieve Ms T’s intent to invest in the property syndicate.

Issues and Key Findings

AFCA determined that the advisor did not provide advice that was in the complainants’ best interests. The advisor failed to establish the complainants’ investment objectives and advised Ms T to roll over superannuation funds without good reason and inconsistently with their target asset allocations.

Moreover, they are also not satisfied that the financial firm had adequately supervised the advisor as its authorised representative.

Because of this, the complainants are entitled to compensation as if it wasn’t for the inappropriate advice of the advisor, Ms T would not have rolled over her superannuation funds to the W SMSF.

Why is the Outcome Fair?

This outcome is fair because the advisor has fundamentally failed to act in the best interests of his clients. Further, the financial firm has failed to adequately supervise its advisor. Therefore, it is fair in all the circumstances the financial firm assumes full responsibility for the complainants’ loss.

Determination

This determination is in favour of the complainants. The complainants have 30 days to accept the determination. If they accept, the financial firm must pay:  

• $161,284.05 to the W SMSF plus interest.
• Up to $2,500 to wind up the W SMSF
• Up to $5,000 for the complainants; professional costs associated with pursuing the complainant
• $2,000 to Ms T for non-financial loss.

The complainants must take all reasonable steps to transfer ownership of the shares in the property syndicate investment to the financial firm within 60 days.

Legal Help After Bad Financial Advice

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