Australia’s
market watchdog has banned a financial adviser for six years after finding he
misled clients while steering their retirement savings into a property fund
that has since collapsed.
Australian Regulator Bans
Financial Adviser for Six Years Over Fund Scheme
The
Australian Securities and Investments Commission (ASIC) banned Milutin
Petrovic from providing financial services after determining he failed key
advice obligations when recommending clients invest in products tied to
his now-liquidated employer, United Global Capital Pty Ltd.
Petrovic’s
scheme involved advising clients to establish self-managed superannuation funds
and then funnel significant portions of their retirement savings into the
Global Capital Property Fund Limited, a related property investment company
that regulators later forced into liquidation.
Last week
FinanceMagnates.com reported
on another ASIC’s case where the regulator cancelled MWL Financial
Services’ license and bans the director for 10 years.
Claims of Limited Advice
Disputed
ASIC found
that Petrovic told clients he was providing only “execution only
advice” despite acting far beyond those bounds. Investigators
determined he actually provided comprehensive comparisons between clients’
existing superannuation funds and his recommended investments, including
specific dollar projections showing how much better off clients would be by
switching.
The
regulator concluded Petrovic violated multiple professional standards by
failing to act in clients’ best interests, providing inappropriate advice,
prioritizing his employer’s interests over clients’, making misleading
statements, and issuing defective advice documents.
“Mr.
Petrovic provided clients with Statements of Advice that were defective and
therefore engaged in misleading and deceptive conduct,” ASIC stated in its
announcement.
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Legal Challenge Pending
Petrovic
has challenged the ban through the Administrative Review Tribunal, with
hearings concluded in July. A decision remains pending. The six-year
prohibition took effect in January 2025, though it was temporarily suspended
before resuming in March.
The case
adds to mounting regulatory action against United Global Capital and its
associates. In August, the Administrative Review Tribunal upheld
a separate 10-year ban against the company’s director Joel Hewish,
whom ASIC had banned in June 2024.
Broader Company Collapse
United
Global Capital entered voluntary administration in
July 2024, with creditors voting to liquidate the Melbourne-based firm in
August. The Federal Court separately ordered the winding up of the Global
Capital Property Fund in October 2024, appointing liquidators from FTI
Consulting.
ASIC had
previously frozen assets of both entities in June 2024 and issued multiple stop
orders on the property fund’s share offerings dating back to 2022.
The
regulator has advised former United Global Capital clients to seek
independent financial advice unconnected to the firm regarding their
circumstances. ASIC has also issued broader warnings about high-pressure sales
tactics targeting superannuation switching decisions.
United
Global Capital had operated under an Australian financial services license
since August 2017 before losing its authorization as part of the regulatory
crackdown.
This article was written by Damian Chmiel at www.financemagnates.com.
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