Apogee Financial Planning To Pay $300,000 After Conflict Of Interest In SMSF Case

Complaint

Mr P and Mrs P bring this complaint in their personal capacity and in their capacity as the directors of the corporate trustee of their self-managed superannuation fund (SMSF), the P SMSF (the complainants).

Mr P and Mrs P say an advisor of Apogee Financial Planning Limited provided them with inappropriate personal financial advice in February 2017 to establish the P SMSF and roll over their existing superannuation funds into the P SMSF. They say this was for the purpose of investing in a property development syndicate. They say the advisor’s brothers were involved in the property syndicate and this created a conflict of interest. Mr P and Mrs P acted on the advice and invested $210,000 which was rolled over from existing superannuation funds to their SMSF.

The financial firm denies the advisor recommended either that Mr P and Mrs P 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 Mr P and Mrs P’s intent to invest in the property syndicate.

This is the second case against Apogee Financial Planning for Bad Financial Advice and Conflicts of Interest.

Issues and key findings

Did The Advisor Provide Appropriate Advice In The Complainants’ Best Interests?

No. The advisor failed to establish the complainants’ investment objectives and advised Mr and Mrs P to roll over superannuation funds without good reason and inconsistently with their target asset allocations. AFCA is not satisfied the advisor prioritised Mr and Mrs P and the P SMSF’s best interests over those of his brothers. Nor are they satisfied that the financial firm has demonstrated it adequately supervised the advisor as its authorised representative.

Are The Complainants Entitled To Compensation?

Yes. But for the inappropriate advice of the advisor, Mr and Mrs P would not have rolled over their superannuation funds to the P SMSF.

Why Is The Outcome Fair?

The 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 the advisor. The breach of the best interests duty is not an apportionable claim at law. The advisor’s failure to warn his clients against reliance on unlicensed financial product advice means it would not be fair to allow the advisor to shift responsibility. It is fair in all 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:  

• $299,063.70 to the P SMSF plus interest
• the reasonable costs up to $2,500 to wind up the P SMSF
• up to $5,000 for the complainants’ professional costs associated with pursuing the complainant
• $2,000 each to Mr P and Mrs P for non-financial loss.

Legal Help After Bad Financial Advice

If you believe you’ve received bad financial advice and would like to discuss your experience with us, reach out to our expert legal team. We are committed to ensuring our clients receive the best possible advice and guidance on their situation, especially in financial matters. You can contact us online, call us at 1300 433 533 or email us at enquiry@fdlegal.com.au.