ASIC bans Nizi Bhandari and his ‘Australian Super Finder’ business
Consumers were potentially exposed to harm – the regulator said – including loss of insurance held through superannuation, extra fees and ATO penalties for inappropriate access to superannuation. Mr. Bhandari and ADG can still appeal to the Administrative Appeals Tribunal.
ASIC has canceled the AFS license of The Australian Dealer Group Pty Ltd and permanently banned Mr. Nizi Bhandari from providing, controlling, or performing any function in relation to financial services or credit activities.
The Australian regulator took away the license after finding The Australian Dealer Group Pty Ltd (ADG) and its sole director Mr. Bhandari were acting dishonestly while assisting consumers to find and consolidate their superannuation and obtain hardship payments.
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. 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.
Mr. Bhandari even told consumers to make false statements to their superannuation fund trustees in order to gain early access to their superannuation balances. By engaging in this conduct, Mr. Bhandari and ADG were involved in multiple contraventions of financial services laws.
The financial watchdog has also canceled ADG’s AFS license, after finding that its business model was not designed to comply with its obligation to act efficiently, honestly, or fairly when providing financial services.
ASIC accuses ADG of having prioritized 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.
Consumers were potentially exposed to harm – the regulator said – including loss of insurance held through superannuation, extra fees, and ATO penalties for inappropriate access to superannuation. Mr. Bhandari and ADG can still appeal to the Administrative Appeals Tribunal.
An ASIC license will cost you
The regulator has recently published the 2019-20 Cost Recovery Implementation Statement (CRIS), which provides regulated entities with details of ASIC’s forecast regulatory costs and activities by industry and subsector. The cost is then reflected in the price of ASIC licenses to operate in Australia.
Securities dealers cost $1.391 million, Over-the-counter (OTC) traders cost $9.661 million, and retail OTC derivatives issuers cost $10,384 million to regulate.
ASIC is currently supervising 1,030 securities dealers, 77 over-the-counter (OTC) traders, and 99 retail OTC derivatives issuers.
Securities dealers pay a minimum levy of $1,000 plus $2.71 per $1 million of annual transaction turnover. Over-the-counter (OTC traders pay a minimum levy of $1,000 plus $4,011 per FTE. OTC derivatives issuers pay a fixed amount of $108,084.
“ASIC is acutely aware of the challenges facing many businesses due to COVID-19 and is committed to working with regulated entities facing difficulties paying industry funding levies. ASIC will consider waivers due to the impact of COVID-19 on a case-by-case basis”, said the announcement.
