The Australian Securities and Investments Commission (ASIC) has accepted an enforceable undertaking (EU) from Breakaway Finance Group Pty Ltd (Breakaway) to cancel their Australian Financial Services (AFS) licence. The EU also includes Breakaway's sole director, Mr Mark Roberts, who will remove himself from the industry for at least two years.
Following an ASIC surveillance into Breakaway and its advisers, ASIC had concerns regarding both the conduct of Breakaway as an AFS licensee and of Mr Roberts as an adviser.
In particular, ASIC had concerns that Breakaway:
- did not sufficiently tailor several key policies and procedures to its operations, thus failing to ensure compliance with relevant laws
- did not effectively deal with conflicts of interest
- did not properly implement or follow some key policies.
In addition, ASIC had concerns that Mr Roberts:
- failed to make reasonable inquiries into the clients' relevant circumstances prior to providing advice
- recommended insurance cover where clients were unable to afford the premiums
- failed to provide adequate product replacement disclosure when recommending clients to switch products.
Breakaway and Mr Roberts acknowledge that ASIC's views are reasonably held.
Under the EU offered to ASIC, Breakaway will:
- cancel its AFS licence
- write to relevant clients who have received advice over the last 3 years to inform them of the EU and of their rights to raise a complaint.
In addition, Mr Roberts has agreed to:
- not provide financial services for a period of two years
- not act as a director, secretary, shareholder, employee, responsible manager or any other officers of an AFS licensee or authorised representative for two years
- notify ASIC and complete the relevant training and education requirements in advance of re-entering the financial services industry.
ASIC acknowledges the cooperation of both Breakaway and Mr Roberts during the surveillance.
Mr Roberts' exclusion will be recorded on ASIC's Financial Advisers Register.
ASIC's MoneySmart website has useful information for clients of advisers who have been excluded from the industry.