ASIC Cancels AFS Licence of The Australian Dealer Group Pty Ltd

The Australian Securities & Investments Commission (ASIC) announced that it has cancelled the Australian financial services (AFS) licence of the Australian Dealer Group Pty Ltd (ADG).

ASIC found that, between November 2017 and December 2020, ADG gave personal advice to consumers about their superannuation despite only being authorised to give general advice. As a result, 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, ADG was involved in multiple contraventions of financial services laws.

According to the Australian regulator, the licence was suspended because ADG failed 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.

ADG has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC's decisions.