ASIC cancels AFSL and permanently bans its responsible manager

Just days after the last of its advisers officially exited the FAR, ASIC announced it has cancelled the licence of an AFSL caught up in the Shield and First Guardian collapses.

ASIC has cancelled the Australian Financial Services (AFS) licence of Financial Services Group Australia Pty Ltd (FSGA), effective 7 June 2025, and permanently banned FSGA’s responsible manager (RM) Graham Holmes.

Ferras Merhi, who himself shows as ceased on the Financial Advisers Register as of 31 May, was the sole director of FSGA from 10 February 2021 to 30 May 2025.

In its weekly analysis of FAR movement, Wealth Data noted that FSGA lost its remaining two advisers this week, marking the loss of all 12 of its advisers over the 2025 calendar year to date. Both advisers are yet to be reappointed elsewhere.

ASIC is investigating Merhi and various entities associated with him in connection with its investigations concerning the Shield Master Fund and the First Guardian Master Fund, with the regulator noting the investigations are ongoing.

Despite being the sole director of FSGA, Merhi and his advice firm Venture Egg Financial Services were both authorised representatives of InterPrac Financial Planning until the end of last month. 

According to ASIC, it cancelled the AFS licence of FSGA after ASIC determined that FSGA had failed to: 

• Take reasonable steps to ensure that two of its representatives provided financial product advice that was appropriate to the client’s circumstances or in the client’s best interests, in relation to certain instances of advice.
• Have available adequate financial and human resources to provide the financial services covered by the licence and to carry out supervisory arrangements.
• Maintain the competence to provide the financial services covered by the licence.
• Lodge its financial statements and auditor’s reports on time.
• Lodge breach reports with ASIC.
• Comply with a condition on its licence that required FSGA to have total assets that exceeded total liabilities, in respect of financial years 2022 and 2023.

The regulator also specified that, while the FSGA licence is cancelled, it must remain a member of AFCA and maintain professional indemnity insurance until 4 June 2026.

ASIC also permanently banned Holmes from providing any financial services, performing any function involved in the carrying on of a financial services business, and controlling an entity that carries on a financial services business.

“ASIC found that Mr Holmes had been involved in the contravention of a financial services law by FSGA, including FSGA’s failure to take reasonable steps to ensures its representatives acted in the best interests of clients and to give appropriate advice to clients,” it said.

“ASIC also found that Mr Holmes had accepted to be FSGA’s RM ‘on paper’ only and to receive RM fees, when he knew he was not fulfilling his duties as an RM. ASIC therefore had reason to believe Mr Holmes is not a fit and proper person to participate in the financial services industry.”

ASIC added that individuals who are nominated by AFS licensees as responsible managers must have direct responsibility for significant day-to-day decisions about the financial services the licensee provides.

FSGA and Holmes have the right to apply to the Administrative Review Tribunal for a review of ASIC’s decisions.

Four advice firms that were licensed under FSGA – Rebellis Financial Services, 5 Point Australia, AS Financial Planning, and STC Financial – have previously been named by ASIC as connected to its investigations into Shield and First Guardian.

All four firms entered into liquidation on 3 December 2024.