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A Perth-based adviser has been banned from providing financial services for five years after being found to have recommended the setting up of low-balance SMSFs.
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Low-balance SMSF spruiker banned
06 January 2020
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ASIC has banned Wayne Blazejczyk from providing financial services for five years for failure to meet best interests obligations when providing advice on SMSFs.
Surveillance of advice by the corporate regulator found that Mr Blazejczyk had recommended that his clients set up SMSFs with low superannuation balances when he was an authorised representative, responsible manager and director of Australian financial services licensee Ballast Financial Management Pty Ltd.
According to ASIC, as a result of this advice, Mr Blazejczyk exposed his clients to financial harm because the ongoing SMSF costs were higher than the costs of their existing superannuation fund.
The ban comes after ASIC recently updated its guidance for AFS licensees on the cost-effectiveness of an SMSF, noting that SMSFs with balances below $500,000 have lower returns after expenses and tax, and will often be uncompetitive, compared to APRA-regulated funds.
ASIC said that Mr Blazejczyk failed to make reasonable inquiries to ascertain his clients’ relevant personal circumstances before giving advice and failed to conduct a reasonable investigation into alternative products before he recommended that his clients establish SMSFs and, among other things, invest in the Bateau Global Opportunities Fund.
“Mr Blazejczyk is the ultimate owner and beneficiary of the SMSF administration service he recommended and the investment manager of Bateau Global Opportunities Fund,” ASIC said.
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ASIC also noted that Mr Blazejczyk failed to disclose his interests in entities related to him, and the associated benefits and remuneration he would receive that could influence the advice he provided, in statements of advice to his clients.
Mr Blazejczyk’s banning will be recorded on ASIC’s publicly available financial advisers register and the banned and disqualified register.
He has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC’s decision.
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