ASIC cancels licence of first firm prosecuted on best interests

The first financial planning firm to be prosecuted by the Australian Securities and Investments Commission (ASIC) for breach of client best interests has now had its Australian Financial Services Licence cancelled.

The firm, the Melbourne-based Golden Financial Group which traded under the name NSG Services and National Sterling Financial Services was the ordered to pay a $1 million penalty for breach of best interests in late 2017 which represented the first civil penalty imposed under the new Future of Financial Advice (FOFA) laws.

The penalty related to financial advice provided to retail clients by NSG advisers on eight occasions between July 2013 and August 2015 with ASIC stating the clients were commonly sold insurance and advised to roll over superannuation accounts that committed them to costly, unsuitable and unnecessary financial arrangements.

Announcing the cancellation of the license today, ASIC said it had followed a period of suspension from 18 March because the regulator was concerned that Golden Financial was not complying with its general licensee obligations.

It said Golden Financial had failed to lodge its annual financial reports and did not have membership of an external dispute resolution system.

ASIC said that in response to its concerns, Gold Financial had advised it that it had ceased its financial services business and requested cancellation of its AFS licence.



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