Business ordered to refund $85,000 in ‘lost’ SMSF monies
The Supreme Court of Western Australia has ordered a financial services business to pay over $85,000 of self-managed superannuation fund (SMSF) monies back to a client, after the company allegedly gave inappropriate and conflicted advice.
The court hearing proceedings initiated by the Financial Ombudsman Service (FOS), ordered that Utopia Financial Services Pty Ltd pay $85,756 plus interest back to the client who incurred a loss as result of the firm's advice.
The court heard that an authorised representative of Utopia allegedly gave Dr Shelley Craddock advice in November 2006, to roll her super ($59,887) out of an industry super fund, into a new SMSF, borrow money and invest in a private trust, of which the authorised representative was the corporate trustee.
The court was told the trust was then going to develop a strata development in Cottlesloe, but "as a result of the global financial crisis" there were difficulties in borrowing funds and buying "all the necessary strata units", Craddock then wanted to "exit her SMSF's investments" but was unable to do so.
The court ruling followed the FOS' investigation into the matter in 2012, and subsequent request for Utopia to pay the monies back to Craddock, something which had not occurred.
FOS had found that Utopia breached its obligation under the Corporations Act 2001 and that Craddock suffered a loss as a result of their breach.
Recommended for you
With regional and rural suburbs exhibiting high spare capacity to invest, Money Management speaks to three regional advisers on the opportunities beyond the major cities and the importance of a strong network.
Platform consolidation is expected to accelerate among financial advisers this year, as software company Finura pinpoints which two platforms are set to be the winners, thanks to this trend.
The software provider has made several appointments in its APAC wealth propositions team, with a focus on driving growth across digital advice, Xplan and strategic partnerships.
The platform has announced it plans to close its Xplore managed discretionary account service in 2026 which holds $2 billion in funds under administration.
