Australian regulator cancels AFS licence of Golden Financial Group
Golden Financial failed to lodge its annual financial reports and did not have membership of an external dispute resolution system.
The Australian Securities & Investments Commission (ASIC) has cancelled the Australian financial services (AFS) licence of Melbourne-based financial services provider, Golden Financial Group Pty Ltd.
The cancellation follows a period of suspension from March 18, 2019. The regulator was concerned that Golden Financial was not complying with its general licensee obligations. Golden Financial failed to file its annual financial reports and did not have membership of an external dispute resolution system.
In response to ASIC’s concerns, Golden Financial advised ASIC that it had ceased its financial services business and requested the cancellation of its AFS licence.
Golden Financial has held AFS licence since April 3, 2008. The licensee was previously trading as NSG Services Pty Ltd and National Sterling Financial Services Pty Ltd.
Back in October 2017 ASIC announced the Federal Court had imposed a civil penalty of $1 million against NSG Services Pty Ltd (NSG) for breaches of the best interests duty introduced under the Future of Financial Advice (FOFA) reforms.
This marked the first civil penalty imposed on a financial services licensee for breaches of the best interests duty.
The penalty related to financial advice provided to retail clients by NSG advisers on eight occasions between July 2013 and August 2015. The clients were commonly sold insurance and advised to roll over superannuation accounts that committed them to costly, unsuitable and unnecessary financial arrangements.
The Court found that NSG’s representatives breached:
- s961B of the Act by failing to take reasonable steps to ensure that they provided advice that complied with the best interests obligations; and
- s961G of the Act by failing to take reasonable steps to ensure that they provided advice that was appropriate to its clients.
Those breaches formed the basis of 20 contraventions in total by NSG of s961K(2) or s961L of the Act, which provides that a financial services licensee must take reasonable steps to ensure its representatives comply with the above sections of the Act.