27. June 2011 09:08
ASIC has accepted an enforceable undertaking from Kilara Financial Solutions Pty Ltd (Kilara) to modify aspects of its compliance culture and to remedy past compliance concerns in the provision of financial advice to retail clients.
Kilara operates a financial services business in Corowa, New South Wales, and has held its Australian financial services (AFS) licence since May 2006. The AFS licence authorises the company to provide financial products to wholesale and retail clients.
In addition to providing financial advice, Kilara acted as investment manager for two managed investment schemes namely, My Income Pool and My Growth Pool.
During the period October 2006 to June 2008, Kilara recommended retail clients switch their superannuation holding into another fund, My Retirement Plan, that invested in either My Income Pool or My Growth Pool. ASIC held concerns that Kilara:
- did not consider the clients’ existing superannuation fund when providing advice to switch superannuation funds
- did not consider, or in the alternative, failed to document the consideration of the relevant personal circumstances, risk tolerance, goals and objectives of some of the clients
- systematically provided defective Statement of Advice documents to clients; and
- failed to provide a Statement of Advice document when advice was provided on a time critical basis in two instances.
Trio Capital Limited (formerly Astarra Capital Limited) was the responsible entity for My Retirement Plan.
The EU offered by Kilara sets out how it intends to rectify these issues and how it will focus on its compliance program to address any shortfalls. The compliance program will be reviewed together with the ongoing operations of Kilara by an independent expert who will regularly report to ASIC during the next 13 months.
In addition, Kilara will write to the relevant clients to whom My Income Pool and/or My Growth Pool products were issued and invite any client who believes they have been adversely impacted by the advice to request Kilara to conduct a review to ensure compliance and appropriate disclosure is made as required by the law. Any complaints will be resolved by Kilara’s internal complaints resolution approach or failing this, a referral can be made to the Financial Ombudsman Service.