It may seem like something out of a movie. A trusted adviser misappropriating funds for their own benefit. But it does happen. And when these events happen, we should take a moment to appreciate the regulatory bodies we have to ensure both compliance and fairness within the industry.
A Sydney SMSF adviser was found guilty of exactly the above. As a result, the Australian Securities and Investment Commission (ASIC) has permanently banned Tram Le Anh Tran. She has also had her Australian financial services license (AFSL) cancelled.
ASIC had concluded that Ms Tran had withdrawn funds from her SMSF clients, and deposited the same funds into her own trust accounts. It was identified that Tran was the sole director and shareholder of this trust.
ASIC’s investigation also revealed a lack of ownership and acknowledgement on Ms Tran’s part, as a result of complaints lodged by her clients to the Australia Financial Complaints Authority (AFCA). When any complaints are raised with this regulating body, parties are required to work cohesively as part of the investigation, so a fair resolution can be sought.
AFCA has stated that Tran had not responded promptly to these complaints, ASIC’s notices, and even provided misleading and false information to the regulator.
ASIC has confirmed that Tran’s AFSL was cancelled following the banning order. She had held this licence since July 2017. The regulator had already previously had dealings with Ms Tran, having previously disqualifying her from being an SMSF auditor. This action was executed last year as part of a review where a total of 17 SMSF auditors were disqualified for failing to meet independance and auditing standards, as well as minimum continuing professional development hours, and lodging annual statements.
At the same time, ASIC are assisting the NSW police with enquiries relating to an investigation they are conducting.
It was only last year that the corporate regulator had permanently banned Nicholas Ellis, a NSW-based financial adviser, after a separate review.
This story highlights the importance of choosing a well-established and trusted company for your financial dealings. When deciding, it is crucial to understand the history of the company, including the way that they operate. Genuine awards and acknowledgements within the industry are one way to determine credibility. Further to this, having a ‘no-obligation’ meeting to understand not only if they can support you, but also if your businesses get along well, is key to the right relationship.
It is important to also note that there are a few signs you should look out for. One tell-tale sign is the inability to respond in a timely manner. If the firm is delayed in responses, or doesn’t respond at all, you should start to question the service they are providing. Another is a poor dispute resolution process. Your feedback is critical to any business, and anyone who doesn’t place immediate importance on this should also be questioned.
We recommend always being open-minded about firms we operate with. A health-check should be considered from time to time and is a way of ensuring you’re receiving the best service on the market, according to your needs. We hope this article is a reminder of what is possible, and what can happen. Be mindful, and stay aware.