The Australian Securities & Investments Commission (Asic) said on 16 February it has accepted an “Enforceable Undertaking” from Real Wealth director David Orth that requires him to cease to provide financial services for five years.
In addition, Orth will make a community benefit payment in the amount of A$400,000 (£225,786, $317,301, €254,237) to Financial Literacy Australia to support the financial capability of vulnerable people.
Between May 2013 and December 2016 Orth implemented a business model at Real Wealth which provided financial services to 750 clients.
The model meant representatives of Real Wealth would offer to assist clients complete a lost superannuation (pension) search.
They would then make representations to the clients about the advantages of consolidating their existing superannuation funds into a single superannuation fund, and the returns on that fund.
During this process the firm would not take into account the personal circumstances or make reasonable inquiries regards a clients objectives, financial situation or needs, Asic said.
“Further, Real Wealth did not conduct a reasonable investigation into alternate financial products which might achieve and meet clients’ objectives and needs most – instead often using a single fund that they had a relationship with, HUB24,” Asic said.
Real Wealth provided a ‘general advice’ warning but did not provide clients with statements of advice for the financial product advice that Real Wealth provided.
Real Wealth charged clients 4.4% of the total balance of their superannuation balances.