ASIC has permanently banned Mr Nizi Bhandari of Bundoora, Victoria, from providing financial services and engaging in credit activities, controlling a financial services or credit business, or performing any function in relation to carrying on a financial services or credit business.

Mr Bhandari was an authorised representative of The Australian Dealer Group Pty Ltd (ADG) between November 2017 and December 2020. For the same period, Mr Bhandari was the sole director, responsible manager and key person under ADG’s Australian financial services (AFS) licence.

ASIC found that Mr Bhandari acted dishonestly while assisting consumers to find and consolidate their superannuation and obtain hardship payments. This included instances where Mr Bhandari told consumers to make false statements to their superannuation fund trustees in order to gain early access to their superannuation balances.

ASIC also found that Mr Bhandari and ADG, through Mr Bhandari, gave personal advice to consumers about their superannuation despite only being authorised to give general advice. As a result, Mr Bhandari and ADG failed to comply with the legal obligations required when giving personal advice, such as acting in the client’s best interests and providing a statement of advice. By engaging in this conduct, Mr Bhandari and ADG were involved in multiple contraventions of financial services laws.

ASIC has also cancelled ADG’s AFS licence, after finding that its business model was not designed to comply with its obligation to act efficiently, honestly or fairly when providing financial services. ADG was found to have:

• prioritised its own interests over the consumers’ interests;
• breached the Australian Tax Office’s (ATO’s) terms and conditions when conducting lost superannuation searches;
• acting without the consent or instruction of consumers;
• charged fees for superannuation consolidation on an ad hoc basis, without transparency, fairness or consistency; and
• pressured consumers into signing Superannuation Consolidation Agreements over the phone, including by not providing time to read its terms and conditions prior to seeking agreement.

As a consequence of this conduct, consumers were potentially exposed to harm, including loss of insurance held through superannuation, extra fees and ATO penalties for inappropriate access to superannuation.

Mr Bhandari and ADG have the right to appeal to the Administrative Appeals Tribunal for a review of ASIC’s decisions.

Mr Bhandari’s banning will be recorded on ASIC’s publicly available Financial Advisers Register and the Banned and Disqualified Persons Register.

Background

ADG operated a website called ‘Australian Super Finder’ through which a consumer could request a search for lost superannuation. ADG offered to consolidate a consumer’s ‘found’ superannuation into a new superannuation fund or a ‘temporary recovery account’.

ASIC, in collaboration with the ATO and the Australian Competition and Consumer Commission (ACCC), previously undertook a review that identified financial advisers, trustees, fund promoters and unlicensed providers were running marketing campaigns based around the provision of ‘free’ lost superannuation search and consolidation services. In many cases, these ‘free’ services were accompanied by the charging of various significant advice fees.

Although consolidation of superannuation accounts can benefit consumers, if not done appropriately it can lead to the loss of valuable insurance and payment of higher fees.

ASIC's MoneySmart website has useful information for consumers about choosing a financial adviser, including how to complain about a financial adviser and what to do if an adviser is banned. MoneySmart also has information about finding lost super, which includes guidance for consumers about how to consolidate your super fund.