1. The applicant filed an application for review in the Tribunal on 17 January 2025. The application was filed in time. The stated grounds for the application included the following:

Precedent Not Followed: > > The decision deviates from similar cases, imposing an overly harsh and disproportionate penalty. For example, a comparable case involved a two-year ban limited to providing personal advice to retail clients (details in ASIC Media Release: https://asic.gov.au/about-asic/news-centre/find-a-media-release/2023-releases/23-335mr-financial-services-and-creditpanel-issues-registration-prohibition-order-against-financial-adviser/) > > Editor's Note 2 in the article highlights that the ART (formerly AAT) granted a stay with conditions, such as restricting scoped advice during the stay. > > Adverse Personal Consequences: > > Immediate enforcement of the ban, despite the merit of the appeal, would result in serious repercussions, including loss of employment and inability to support dependents. > > Proof of Merit for Appeal : > > In reviewing ASIC's decision document, I have identified significant factual inaccuracies and misunderstandings of the business model and my specific role. These include, but are not limited to: > > Misunderstanding of Business Model and My Role: > > The decision inaccurately states that I recommended a specific investment. This is incorrect; my role was to facilitate investments that clients had independently selected prior to being referred to me by a referral partner. > > Inconsistency Regarding Target Returns : > > ASIC claims it was unreasonable for me to reference a 13% target return on the GCPF product and asserts that I had no basis for this figure. > > In reality, this target return was published in the investment prospectus, based on a thorough analysis by the investment managers. This prospectus was submitted to ASIC. Furthermore, the decision document acknowledges that the actual returns achieved on projects within the fund were as high as 22%, significantly exceeding the target, which further validates the reliability of the original projections. > > These errors demonstrate a lack of understanding of the facts and the context of my actions, providing substantial grounds for my appeal.

2. For the reasons that follow, I have decided to vary the period of the banning order from 6 years to 3 years.

1. The applicant was an employee of a company called United Global Capital Pty Ltd (UGC) for the period 6 April 2020 until 27 July 2024. These proceedings concern the work done by the applicant while at UGC, what I have described below as the "UGC business model" and the role the applicant performed in executing the UGC business model.

Qualifications and work experience of applicant

1. The applicant's qualifications include:[1]

(a) Diploma of Financial Services (Insurance Broking); > > (b) Bachelor of Commerce (Financial Planning and Accounting); > > (c) Masters of Financial Planning; > > (d) Certificate IV in Finance and Mortgage Broking; > > (e) Master of Business Administration (Entrepreneurial Management); > > (f) Self-Managed Super Funds Accredited Course; > > (g) Certified Financial Planner certification (as at January 2025 to be completed).

2. In addition to UGC, he has worked for the following companies, as an authorised representative of an Australian financial services licence holder, in the periods specified:[2]

(a) AMP Financial Planning Pty Ltd - 22 November 2016 to 3 April 2018; > > (b) Advice Evolution Pty Ltd - 23 April 2018 to 31 March 2020; > > (c) River X Financial Services Pty Ltd (River X) - 19 August 2024 to 28 August 2024.

3. In the period 19 August 2024 until 18 March 2025 the applicant worked for Fisher Investments Australasia Pty Ltd (Fisher Investments). In his statement to the Tribunal, the applicant describes his role at Fisher Investments as follows:[3]

19. In this role, Fisher Investments would advertise to wholesale investors only via ads on Facebook and LinkedIn. My role was to call wholesale investors who had expressed interest and give a presentation about Fisher Investment. Once clients had been converted, I would then hand them over to an Investment Counsellor who then provided investment and financial advice. Although I wasn't in an advice role, at least I was still working in the financial services industry.

4. I note there appears an overlap in relation to the applicant's employment with River X and Fisher Investments, the explanation of which is unclear. However, nothing appears to turn on this discrepancy.
5. The applicant now works as a real estate agent, being paid a retainer and commission.

1. UGC was a private wealth management business providing financial advisory services to private clients. As noted in the Reasons (citations omitted), UGC:[4]

(a) operated a private wealth management business which provided strategic financial advisory services to private clients in the areas of cash flow management, budgeting, tax planning, superannuation advice, investment advice, risk insurance and estate planning; > > (b) under its licence, was authorised to carry on a financial services business of providing financial product advice and dealing in, for retail and wholesale clients, various financial products; > > (c) since 3 April 2018, has had 123 authorised representatives, and has had the following corporate authorised representatives: > > i. Integral Wealth Group Pty Ltd from 30 May 2019 to 15 September 2021 (Mr Doumani has been a director since 19 August 2020); > > ii. Wealth Rite Pty Ltd from 7 September 2020 to 15 September 2021 (Mr Pappas was a director from 4 August 2015 to 13 July 2021, and a shareholder,); and > > iii. Empire Wealth Group Australia Pty Ltd from 7 April 2020 to 24 February > > 2022; and > > (d) went into external administration on 5 July 2024.

2. The sole director and secretary of UGC was Mr Joel Hewish. The applicant was one of UGC's authorised representatives.
3. I will refer to the company Integral Wealth Group Pty Ltd as "Integral" and Wealth Rite Pty Ltd as "Wealth Rite".

1. One of the products promoted by UGC related to a company called Global Capital Property Fund Ltd (GCPF). Of GCPF, the Reasons record (citations omitted):[5]

18. Global Capital Property Fund Ltd (GCPF) was incorporated on 15 August 2019. Its directors were Mr Hewish, Mr Dickinson and Mr Pappas.13 Mr Hewish owned 25% of its shares, Mr Dickinson owned 25% of its shares, and CJCDN Pty Ltd owned 50% of its shares. > > 19. GCPF was a property development investment company, which: > > (a) was a corporate authorised representative of UGC since 25 March 2020; and > > (b) was managed by GCPF Management Pty Ltd (GCPF and GCPF Management Pty Ltd had the same directors and shareholders). > > 20. GCPF offered shares to potential investors. It invested what investors paid for the offered shares by either providing equity or loans, or by entering joint ventures to develop in Australia property or undertake in Australia real estate projects. > > 21. The joint ventures were conducted through special purpose vehicles. A special purpose vehicle was either a company or a trust arrangement.

2. Of the operations of GCPF, the Reasons record (citations omitted):[6]

22. Since 25 March 2020, GCPF has issued three prospectuses and four replacement prospectuses21 through which it has sought to raise approximately $490 million from retail and sophisticated investors. > > 23. The first replacement prospectus was issued in March 2020 and disclosed that: > > (a) 'The repayment of your investment or rate of return is not guaranteed by Global Capital Property Fund Limited or its Directors. You may lose some or all your investment. Global Capital Property Fund Limited will only make Dividend payments to Ordinary Shareholders if it earns net income. > > (b) 'The Shares offered pursuant to this Prospectus should be considered highly speculative'; and > > (c) the offer presents a target rate of return for investors of 13% pa after all fees. > > 24. A second replacement prospectus was issued in May 2021 and disclosed that: > > (a) the Pappys Beach Estate (Shoal Point) project and the Carlile project had proceeded, and a third investment was made in the Kooyongkoot House project which was operated by another special purpose vehicle; > > (b) 'The Shares offered pursuant to this Prospectus should be considered highly speculative'; and > > (c) the company aims to generate a rate of return to investors of 13% pa after all fees. > > 25. Further replacement prospectuses were issued in October 2021 and the second of those disclosed that: > > (a) a fourth investment was made in the Serpells Place project which was operated by another special purpose vehicle; > > (b) 'The Shares offered pursuant to this Prospectus should be considered highly speculative'; and > > (c) the company aims to generate a rate of return to investors of 13% pa after all fees. > > 26. The final prospectus was issued in June 2022 and disclosed that in addition to an earlier joint venture with Point Bay Developments under which GCPF had invested $15 million in the Shoal Point project, GCPF had signed a loan agreement with Point Bay Developments to advance $7.2 million. This prospectus also disclosed that the loans advanced regarding the Kooyongkoot House Project, the Carlile Project and Serpells Place Project had each increased. > > 27. Regarding GCPF's aim of generating a return to investors of 13%, this figure was calculated by Mr Hewish and Mr Dickinson, and then ratified by Mr Pappas prior to the issue of the first prospectus. As of 15 December 2022, GCPF's return was about 7.5% pa. > > 28. Regarding returns from GCPF's projects: > > (a) the final prospectus discloses that the Carlile Project had a forecast return of 0%; > > (b) a subsequent draft replacement prospectus disclosed that the Carlile Project would see a negative return of 8.98% and completion would be delayed; > > (c) two additional projects, Mt Atkinson and Equal 314, had been delayed by more than a year; and > > (d) as of 24 January 2023, Greenwattle was the only project of fifteen projects to have been completed with a reported return of 22% pa - however GCPF's investment in this project was only $750,000 over 7 months.

3. Relevant to the matters in dispute in these proceedings is the target figure return of 13% per annum referred to in the prospectuses issued by GCPF.
4. Another product promoted by UGC was the Pivotal Diversified Fund (Pivotal). Of this fund, the Reasons record (citations omitted):[7]

32. The Pivotal Diversified Fund (Pivotal) was an open-ended unlisted registered managed investment scheme that was open to retail investors. > > 33. It invested a portion of funds in UGC-related financial products, including GCPF, UGC Global Alpha Fund (a hedge fund), UGC Platinum Alpha Fund (a global equity fund), and UGC Private Equity Fund (a venture capital fund). > > 34. Regarding Pivotal: > > (a) the investment manager was Australian Funds Management Group Pty Ltd; and > > (b) the responsible entity was Vasco Responsible Entity Services Ltd. > > 35. Regarding Australian Funds Management Group Pty Ltd: > > (a) Mr Hewish, Mr Pappas and Mr Dickinson were its directors; > > (b) it was a corporate authorised representative of UGC; and > > (c) 50% of its shares were owned by AFMG Holdings Pty Ltd (of which Ms Pappas was the director) and its other shareholders were N & J Consultants Pty Ltd and MPDP Pty Ltd (entities associated with Mr Doumani and Mr Pattinson). > > 36. Pivotal's Product Disclosure Statement discloses that: > > (a) Australian Funds Management Group Pty Ltd was targeting an annual rate of return to investors of 13% pa, pre-tax and net of all fees and expenses, over a rolling five year period; and > > (b) it was a speculative investment.

1. The UGC business model is described in the Reasons in section B3:[8]. That part of the business in which the applicant was involved has been described in evidence as a "limited advice" model or as providing "execution only advice" (UGC business model).
2. The applicant's role was said to be executing instructions of clients to establish a self managed superannuation fund (SMSF).
3. Prior to the involvement of the applicant, there would be a referral process to UGC of potential clients and the provision of a document entitled "Self Managed Super Fund Establishment & Statement of Advice Proposal"[9]. If a potential client wished to proceed, they would sign this document.
4. An example of what the Self Managed Super Fund Establishment & Statement of Advice Proposal document (advice proposal) said is as follows:[10]

SCOPE OF ADVICE & PROJECT OVERVIEW > > Thank you for considering our organisation to partner with to help you achieve the financial outcomes you are hoping to achieve. > > Detailed below, I outline the scope of advice and work you are engaging our firm to provide to you. > > Scope of Advice & Project Overview > > Identification of lifestyle and financial • objectives and the time frames to achieve those objectives. > > • Review of current superannuation arrangements and appropriateness of current arrangements to meet desired outcomes. > > • Advice on how best to rollover benefits within the existing superannuation funds to your new self-managed superannuation fund > > • Advice on how best to protect existing benefits contained in existing funds or replace them with more appropriate benefits. > > • Establishment of a self-managed superannuation fund. > > • Application for ABN and TFN for new self-managed superannuation fund. > > • Establishment of a bank account for the self-managed superannuation fund. > > • Preparation and execution of rollovers to new self-managed superannuation fund. > > • Establishment of a compliant and documented investment strategy for your new self-managed superannuation fund. > > • Review of personal risk insurance needs. > > • Advice on how best to implement a risk management strategy using personal insurances i.e. life, total and permanent disability, income protection, trauma insurance. > > Our Philosophy > > At UGC, we provide you with long term wealth creation and wealth management solutions through sound and tax effective investment and financial advice complementary to your lifestyle, family and financial needs. > > Using sophisticated financial models and analytical tools, we are able to gain a detailed understanding of your current financial position, and advise on specific strategies to achieve your objectives. By doing so, we can provide you with the confidence and knowledge that you are in control of your financial affairs. > > Our advice development process is consultative in nature and one where the recommendations developed will be following close and ongoing consultation with you. In doing this, we ensure that the advice is specific in nature and serves your best interests. > > While the advice contained within the Statement of Advice will be provided to serve your best interests, you are under no obligation to accept the recommendations contained within it and have the right to reject any or all of the recommendations. > > Our Philosophy & Recommended Approach > > Having regard to your particular circumstance and what I know about you already, I outline below my approach to developing your Statement of Advice and establishing your self-managed superannuation fund: > > Data collection. This involves receiving copies of important documents, policies, contracts, agreements, statements etc as outlined in the 'What We Need From You' section of this proposal. We will also require you to sign Information Authorities enabling us to gain access to information on your behalf. > > Introduction & Fact find meeting. Here we gain a detailed understanding of your financial circumstance and desired outcomes. This meeting will also be used to better understand the circumstances surrounding your existing arrangements. > > Self-Managed Superannuation Fund Establishment. We arrange the preparation of the legal documentation which establishes your self-managed superannuation fund trust and corporate trustee, as well as documents of meeting minutes, appointments, the investment strategy and other necessary documentation. We register the new super fund and corporate trustee with the regulators (ATO and ASIC). > > Analysis of current arrangements and advice formulation. This will involve us analysing the information you have provided, developing our recommendations and consulting with you on our recommendations. > > Preparation of the Statement of Advice. Once the advice has been developed, we are required by law to formulate our recommendations and the reasons for our recommendations in a formal document called a Statement of Advice. The cost of implementing our recommendations and any remuneration we receive will be documented within the Statement of Advice. > > Presentation of the Statement of Advice. Here we will present the Statement of Advice, discuss the final recommendations and outcomes and where required finalise any last matters. > > Implementation of recommendations. Upon accepting the recommendations, UGC will do all things necessary to implement the agreed recommendations including establishing documentation, tax structures, strategies etc. > > I estimate it will take approximately 8 - 10 weeks to complete the Statement of Advice, establish your self-managed superannuation fund and complete your rollovers to the self-managed superannuation fund.

5. That part of the process, up to a client signing the advice proposal, was summarised by the respondent in the following terms:[11]

45. As noted above, each of the Clients were introduced to UGC and then Mr Petrovic through referrals made by Wealth Rite or Integral using the same or similar process. > > 46. Prospective clients were first drawn in via promotions on a third-party website which offered customers the opportunity to win an iPhone. After providing their details in order to win the phone, their contact details were subsequently sold to Levitate Pty Ltd, which cold called the customers and introduced itself as a free service offering "superannuation health checks". Levitate representatives screened individuals for referral to UGC or its corporate authorised representatives, namely Integral or Wealth Rite, by asking general questions about their age, employment status and superannuation balance. Levitate then passed on the client details, where suiting certain criteria, to Wealth Rite and Integral. > > 47. Wealth Rite or Integral Wealth Group subsequently used those contact details to call potential customers and to engage with them using a pre-set telemarketing script. Initially, during the call, the representatives would advise customers that their "only job today is to see if you qualify to be shown some tax-effective ways to potentially increase your returns inside your Superfund by up to 150%'. Later the set script was changed such that the representative would advise: "'Just a quick call - we are a free information service, so not trying to sell you anything. What we are doing is providing information regarding some different options that have been released around superannuation." The clients were then told they would be contacted by a "super specialist"'. > > 48. The "super specialist", also from Wealth Rite or Intergral would then call and present the client with a zoom presentation. In the case of Integral, that presentation was entitled "Helping secure your financial future", and included general product advice disclaimers and information about GCPF. > > 49. Prospective clients who expressed an interest in proceeding were then called by a representative who required them to confirm that they were looking "to invest all available funds, that's 75% into GCPF and 25% into Pivotal", and who then arranged for them to sign documents that were given to UGC, being documents titled 'SMSF Application Form', an 'Authority to Provide Contact Details & Acknowledgement', a 'Disclaimer and Service Agreement', an 'Information & Transfer of Servicing Adviser Authority' and a 'Self Managed Super Fund Establishment & Statement of Advice Proposal' (the SOA proposal). > > 50. Where the client proceeded with this course of action, Wealth Rite or Integral would receive a referral fee amounting to 3.3% of the amount invested into GCPF or Pivotal (which usually constituted the large majority of the superannuation balance), which was deducted directly from the client's superannuation funds.

Role of the applicant in the UGC business model

1. A summary of the role performed by the applicant is set out in his statement dated 23 May 2025, where he says (footnotes omitted):[12]

26. I understand that UGC offered both limited financial advice and comprehensive financial advice. In my role at UGC, I was referred limited advice clients. This means that the clients I worked for wanted execution only advice in relation to the establishment of an SMSF and advice about the rollover of benefits to that new super fund, including associated insurance and/or estate planning advice. Clients who had asked for comprehensive advice, including investment advice, were provided another letter of engagement, this rarely occurred. > > 27. My understanding was that UCG engaged referral partners who would speak to potential clients. These referral partners would give a presentation about the investments as general advice, not tailored to the potential clients' circumstances. If the potential clients decided they wanted to invest and establish an SMSF, the referral partners would send the client the PDS for the investment and the relevant forms to complete. > > 28. Before these clients were referred to UGC, they had already executed an SMSF Application Form. This authorised UGC to establish an SMSF and invest superannuation funds in accordance with the client's specified investment instructions. UGC's ARs, including myself, would receive the clients' completed and signed application forms providing instructions to establish an SMSF and advising which investments the clients had selected. > > 29. My understanding was that I wasn't giving the clients investment advice because they had already decided they wanted to make the investments. I saw my role as to help the clients implement the investment choices that they'd already made. > > 30. I would process the clients according to the stages set out in UGC's workflow Excel spreadsheet. This would include sending them a welcome email and contacting them with a welcome call, following UGC's script. > > 31. This script included explaining the scope of engagement and explaining how the clients had been referred to me. I would explain to clients exactly what I was doing for them and the scope of my role as well as the risks of investing in a property investment fund. I would tell the clients they could get comprehensive advice if they wanted to but they almost always declined it because of the extra cost. The clients would then sign a template letter of engagement with me which set out the scope of the advice. > > 32. I also made a fact find call with the clients at one of the initial stages of the process after they had filled out the fact find document. This included clarifying the clients' current financial position and their intentions and goals. > > 33. After this fact find, one of UGC's paraplanners would do a benefit analysis using UGC's template. The paraplanner would call the superfunds that the clients were currently with and fill out a excel spreadsheet with a comparison between that fund and the proposed new fund. > > 34. I would then look at this spreadsheet to make sure that the returns would be higher in the proposed fund. I followed UGC's procedures which stated that if the benefit analysis showed that the client would likely be in a worse position or it estimated a likely benefit of less than $100,000 over 10 years, I would not proceed with the SOA. For example, I advised clients [names not reproduced] to retain their current superannuation and not to proceed with setting up an SMSF and placing the investments they had selected based on the results of their benefit analysis. Now produced and shown to me marked Annexure "MP-1" is a copy of the benefit analysis spreadsheet for [names not reproduced]. There were instances where the benefit analysis showed that the target returns of their existing funds would be higher. In those cases, I recommended to the clients that they stayed with their existing super fund and did not proceed. I relied on the cost benefit analyses and did not blindly follow the clients' instructions. > > 36. After the benefit analysis, it would take about two weeks for the paraplanners to draft the Statement of Advice (SOA) using UGC's template. The template SOA had been approved by lawyers and included disclosures about the nature of the investments. This was then sent to me and I would check it and sign off on it. > > 37. The next stage was for me to email the SOA to the client and then present it to them via a phone call. During the presentation, I would take the clients through the SOA page by page. > > 38. During this meeting, where the client had chosen to invest their SMSF in the Global Capital Property Fund (GCPF), I would clarify with the clients that the investment was in property. I explained that the fund had a target return of 13% so it had different risks to their current super fund. If the fund successfully achieved those higher returns, they would be better off but if the risks didn't end up paying off, the fund might not reach those high returns. I told the clients it was only suitable as a long-term investment so they would need to be in the investment for at least 3 years. I also explained that it was a new fund which meant they couldn't withdraw from it for 3 years. I made sure they were comfortable with the different risks before proceeding further. An example of this conversation is the transcript of my phone calls with [names not reproduced]. > > 39. I would also refer clients to the website [not reproduced] and tell them that the website included a tab on current and past projects so they could see what the projects were. The front page of this website had a picture of Joel on it. Some clients asked about Joel and I explained to them that Joel started the property investment fund with other investors.

1. In investigating the actions of the applicant, the respondent considered the position of six clients of UGC (Clients). Where necessary, I will refer to the Clients using the same numbering system adopted by the respondent in the Reasons, rather than referring to the Clients by name.
2. As appropriate, findings were made for each Client in respect of failures of the applicant under the following provisions of the Act:

(a) Section 952 E - Giving a defective disclosure document or statement (whether known to be defective); > > (b) Section 961B - Provider must act in the best interests of the client; > > (c) Section 961G - resulting advice must be appropriate to the client; > > (d) section 961J - Conflict between client's interests and those of provider, licensee, authorised representative or associate; > > (e) section 1041H - misleading or deceptive conduct (civil liability only).

3. A summary of the dealings with each Client and how they invested is set out in the respondent's Statement of Facts, Issues and Contentions (SFICS).
4. For present purposes, it is sufficient to set out the respondent's findings in connection with Client 1, which the respondent did by reference to each of the sections of the Act identified in the previous paragraph.
5. Following the introduction of Client 1, who had signed an advice proposal, the applicant met with Client 1 to complete a fact find document. Client 1 was:

(a) 57 years old, wishing to retire at 65; > > (b) earning $89,000 per annum; > > and had a superannuation balance of approximately $358,000 as well as Life and Total Permanent Disability (TPD) insurance cover.

6. Client 1's wife, age 56, was earning $1900 per annum from a carers allowance.
7. A file note of the telephone conversation the applicant had with Client 1 and his wife records:[13]

(a) they had a preference was for (sic) growth assets; > > (b) they requested a need to set up an SMSF and invest in GCPF and were solely looking at increasing investment returns; and > > (c) limited insurance was being recommended for [the wife] due to affordability which may mean she is underinsured - if cost was not a factor he would be recommending full amounts of coverage.

8. A Statement of Advice (SOA) was prepared by "paraplanners" (other employees of UGC) who provided it to the applicant. The SOA was presented by the applicant to Client 1. The SOA recommended:[14]

(a) keep $7,000 in his QSuper fund and rollover the balance of around $351,000 into a newly established SMSF; > > (b) invest $303,000 into GCPF; > > (c) keep his insurance with QSuper; > > (d) continue to have his employer super contributions paid into his QSuper account and periodically rollover accumulated funds into the SMSF; and > > (e) review his superannuation beneficiaries in line with the associated recommendations.

9. Client 1 agreed to the recommendations on 13 July 2021[15].
10. Of what occurred, the respondent made the following findings.

Section 952 E - Giving a defective disclosure document or statement (whether known to be defective);

1. The respondent determined the SOA was a disclosure document under s 952B and was defective "because it contained misleading or deceptive statements or omissions"[16].
2. Of why it was defective, the respondent said that the applicant had offered to provide advice on financial matters, whether the client's potential objectives were in their best interest and whether the client would be in a better position. The applicant represented in the SOA that the advice given would address whether the establishment of a self managed super fund (SMFS) would be in the client's interest. This was misleading because it likely caused the client to accept what was represented even though the applicant was providing execution only advice on the basis the client had decided that he wanted to establish an SMSF and have it invested in GCPF.[17]
3. The respondent also says the applicant gave a defective disclosure document in connection with the estimate of future returns. Of the GCPF targeted return in its prospectus of 13% and the estimated balance after 10 years, the respondent found:[18]

(a) there was no factual basis for stating these returns would be achieved. In this regard the respondent said "the historical investment returns for different asset classes for 2006-2020 show average returns from Australian property of 5.90% and average return from global property of 7.0%". > > (b) the applicant misrepresented that returns from investment in GCPF would significantly exceed returns from the existing superannuation investment because "there was not a reasonable basis for assuming that the target return of 13% pa for each of GCPF and Pivotal, which was taken up in the benefit analysis, was achievable"; and > > (c) by reason of the above, it was misleading by virtue of s 769C(1) of the Act, which relates to representations about future matters being misleading if made without reasonable grounds.

4. In reaching this conclusion the delegate states:[19]

105. I do not find that Mr Petrovic gave a defective disclosure document to Client 1 regarding a risk representation. The representation appears accurate, implies a potential capital loss, and was as follows: 'the proposed investment will move you away from a strategy that is diversified across a wide range of investments and asset classes to an investment that has significantly less diversification and is exposed largely to one asset class (real estate). By taking this investment approach, you should be aware that downturns in the real estate market could have a more significant impact on your overall portfolio performance'.

Section 961B - Provider must act in the best interests of the client;

1. The respondent concluded the applicant failed to act in the best interest of Client 1 and breached his duty under s 961B(1) of the Act for the following reasons:[20]

(a) the applicant failed to correctly identify goals. Rather, the matters stated by the applicant as being goals were financial products or strategies that might be used to achieve goals; > > (b) the applicant failed to conduct a reasonable investigation into financial products that might meet the goals of the client, namely to retire at 65 and have an income of $700 per week and able to meet expenses of $300 per week; > > (c) the applicant failed to adequately assess the risk profile of the client and identify his investment experience; > > (d) the applicant failed to base all judgements on the client and his relevant circumstances, including domestic and health issues. In addition, the strategy implemented was despite a recommendation from the applicant that the client considered diversifying the asset classes in which he was investing.

2. First, the respondent rejected a submission the applicant had "reasonably acted in reliance of UGC's information and instructions" and/or that he had so acted "prior to the clarity provided by ASIC information sheets 267 and 274".[21]
3. Secondly, the respondent rejected a submission that the applicant had satisfied the duty by doing each of the things specified in s 961B(2) of the Act. The respondent recorded the submission in the following terms:[22]

87. The submission states that Mr Petrovic's role was limited to providing advice to 'those clients who sought execution only advice in relation to the establishment of a self-managed fund and advice as to the effective and appropriate rollover of benefits to the new super fund, including associated insurance and/or estate planning advice (Limited Advice Clients)'. > > 88. The submission also states that when Mr Petrovic was assigned a limited advice client: > > (a) the client had already been identified as a limited advice client by a corporate authorised representative, had already executed documents and had already confirmed to another UGC authorised representative that they did not seek additional advice; and > > (b) Mr Petrovic was required to follow UGC's processes and procedures which included undertaking a client fact find meeting, offering to provide comprehensive advice for an additional fee 'reviewing UGC's Benefit Analysis' which compared the current superannuation fund with the proposed SMSF and using 'UGC's template documents' which included call scripts.

4. Of this submission the respondent concluded:[23]

... Irrespective of what the clients disclosed to Mr Petrovic it was incumbent on him, if he was to rely on the course set out in s961B(2) to show that he acted in the client's best interest, to identify 'the subject matter of the advice that had been sought by the client (whether explicitly or implicitly)' (s961B(2)(b)(i)) and consider the subject matter and related financial products (s961B(2)(e)). The subject matter, in the case of each client, was how to best provide for retirement. Advice about how to establish an SMSF and have it invest its funds in GCPF or Pivotal is an option for providing for retirement. It is not the subject matter of the advice.

5. Thirdly, the respondent rejected the proposition that the benefit analysis set out in the SOA addressed any shortcomings in the applicant's actions. In this regard, the respondent said that as at 15 December 2022 returns for GCPF were about 7.5% pa and there was not a reasonable basis for assuming a target return of 13% pa for each of GCPF and Pivotal was achievable. The SOA for Client 1 is dated 5 July 2021. It was issued prior to the first development being completed, completion being about 24 January 2023 and the return being 22% pa. Further, the investment which had been made by GCPF was only $700,000.[24]
6. In summary, the respondent concluded:[25]

94. For the reasons that ASIC had concerns about the following, I find that Mr Petrovic failed to act in the best interests of [Client 1] regarding the SOA in breach of s961B(1) because: > > (a) Mr Petrovic failed to identify the subject matter of the advice sought (how to best provide for retirement); > > (b) Mr Petrovic failed to conduct a reasonable investigation into the financial products that might meet [Client 1's] goals, financial situation and needs; and > > (c) Mr Petrovic failed to identify Client 1's relevant circumstances. > > 95. Additionally, Mr Petrovic breached s961B(1) because Mr Petrovic, despite the fact that diversification lessens risk and he recognised this, made a recommendation that was, in substance, a recommendation that [Client 1] invest in property, and did not involve diversification.

Section 961G - resulting advice must be appropriate to the client;

1. In respect of Client 1, the respondent said (citations omitted):[26]

96 ASIC was concerned that Mr Petrovic provided the advice when it was not reasonable to conclude that it was appropriate for [Client 1] in breach of s961G because: > > (a) 86% of his retirement savings was to be invested in a highly speculative investment in circumstances where there was no evidence that it had ever achieved its targeted return of 13%; > > (b) his superannuation balance would be eroded by fees as his SMSF would be paying upfront fees of $14,555 or 4.14% of its balance (being a $1,795 SOA preparation fee, a $2,200 SMSF establishment fee and $10,560 referral fee paid to Wealth Rite Pty Ltd) and he would have to pay $2,200 pa in ongoing administration fees and a $17,600 capital raising fee; > > (c) his superannuation fees would increase from $2,542 pa to $8,412 pa and he would have to pay $2,200 pa in ongoing administration fees; > > (d) his goal was to invest in a wholesale fund, but GCPF was not a wholesale fund; and > > (e) it is unknown whether he would have income of $700 pw and expenses of $300 pw when he retires at 65.

2. By reason of the matters referred to above, the respondent said the advice given by the applicant was not appropriate.[27]

section 961J - Conflict between client's interests and those of provider, licensee, authorised representative or associate;

1. Here, the respondent said the applicant failed to give priority to the client's interests when he knew, or ought to have known, that there was a conflict between those interests and UGC's interests.
2. In respect of Client 1, the following matters were identified:[28]

(a) Mr Petrovic advised Client 1 to keep $7,000 in his QSuper fund and rollover the balance of around $351,000 into a newly established SMSF and invest $303,000 of the funds in the SMSF in GCPF; > > (b) GCPF is a highly speculative product which is owned and operated by entities related to UGC; > > (c) Mr Petrovic failed to act in Client 1's best interests in contravention of s961B(1) with the result that the advice given was not appropriate in contravention of s961G - in particular, 86% of Client 1's retirement savings was invested in a highly speculative investment in circumstances where there is no evidence that it has ever achieved its targeted return of 13%; > > (d) as a result of the advice: > > • in terms of upfront fees, Client 1's SMSF paid $14,555 to UGC and Wealth Rite Pty Ltd, and a $17,600 capital raising fee; and > > • in terms of ongoing fees, Client 1'sSMSF will pay $2,200 pa for SMSF administration services to UGC; and > > (e) UGC's interests have been prioritised over Client 1's interests. Client 1 who initially had a superannuation balance of $358,037 in his QSuper fund, has paid $32,155 in upfront fees and will incur $2,200 in annual fees to establish an SMSF and invest $303,000 in a highly speculative product, where, on Mr Petrovic's analysis, 'If the investments returns fall consistently below 8% (net of ongoing fees and charges, with contributions), the value added would become marginal'.

section 1041H - misleading or deceptive conduct (civil liability only).

1. In the Reasons, the respondent said the contravening conduct was the applicant telling to Client 1 the applicant was acting in Client 1's best interests or giving him appropriate advice, that is complying with ss 961B(1) and 961G, when the authority/acknowledgement and SOA stated this was not the case. The respondent said:[29]

An elaboration of ASIC's concern is as follows: > > (a) Wealth Rite Pty Ltd on 19 May 2021 stated in writing to [Client 1] (via the authority/acknowledgement) that there would not be compliance with s961B(1) and s961G; > > (b) Mr Petrovic on 26 May 2021 and 24 June 2021 stated orally to [Client 1] that there would be compliance with s961B(1) and s961G and that what he stated was likely to mislead [Client 1] because Wealth Rite Pty Ltd had stated to him the contrary; > > (c) Mr Petrovic on 5 July 2021 stated in writing to [Client 1] (via the SOA) that there would not be compliance with s961B(1) and s961G; and > > (d) Mr Petrovic on 9 July 2021 stated orally to [Client 1] that there had been compliance with s961B and s961G and what he stated was likely to mislead [Client 1] because Mr Petrovic in the SOA had stated to him the contrary.

2. The call on 26 May 2021 was found to be not likely to mislead as the applicant's statements to Client 1 did not appear to the delegate to differ in substance from what Wealth Rite Pty Ltd stated.
3. Of the call on 24 June 2021 the respondent's delegate said:[30]

111. In the call of 24 June 2021 Mr Petrovic stated that he was obliged to make sure that an investment in GCPF was in Client 1's best interest. Wealth Rite Pty Ltd had stated to Client 1 the contrary. Wealth Rite Pty Ltd had stated: > > (a) 'Any advice provided to you by UGC, will initially be limited to the effective and appropriate rollover of benefits to your new SMSF'; and > > (b) 'UGC will NOT be acting as your personal investment adviser in respect of any product discussed, recommended or introduced to you by Wealthrite'. > > 112. I am satisfied that what Mr Petrovic represented in the call of 24 June 2021 was likely to be misleading because it was likely to cause Client 1 to apprehend that Mr Petrovic would be making sure that an investment in GCPF was in Client 1's best interest when: > > (a) the Wealth Rite Pty Ltd representations showed that it was not the case; and > > (b) Mr Petrovic would have been aware that he was going to engage in the conduct found above as comprising a non-compliance with s961B(1). > > 113. I find that, regarding this call, Mr Petrovic did not comply with s1041H(1).

4. Similarly, having regard to the content of the 9 July 2021 call, which suggested the applicant was obliged to make sure that an investment in GCPF was in Client 1's best interests (this statement being contrary to the SOA), the delegate said:[31]

116. I am satisfied that what Mr Petrovic represented in the call of 9 July 2021 was likely to be misleading because it was likely to cause Client 1 to apprehend that Mr Petrovic had made sure that an investment in GCPF was in Client 1 s best interest when: > > (a) the Wealth Rite Pty Ltd representations showed that it was not the case; and > > (b) Mr Petrovic would have been aware that he was going to engage in the conduct found above as comprising a non-compliance with s961B(1). > > 117. I find that, regarding this call, Mr Petrovic did not comply with s1041H(1).

1. The respondent also made the following findings.
2. Firstly, the applicant was not properly trained or competent. This finding related to s920A(1)(da) of the Act.
3. Having rejected the proposition that the applicant approached his work of providing advice on the basis "one size fits all" due to the limited sample size of the clients reviewed by the respondent, the respondent nonetheless concluded the applicant was not adequately trained or was not competent to provide one or more financial services, perform one or more functions as an officer of an entity that carries on a financial services business, or control an entity that carries on a financial services business.
4. In reaching this conclusion, the respondent said:[32]

Mr Petrovic's non-compliances with financial services laws are numerous and involved a failure to provide adequate services to clients and the preferring of UGC's interests over those of clients. At the hearing Mr Petrovic did not acknowledge that there were non-compliances, that he should not have treated the clients as only wanting execution advice or that it was incorrect for him to rely on UGC's information and instructions in the context of his legal obligations.

5. Secondly, the respondent found the applicant was not a fit and proper person. This finding related to s 920A(1)(d) of the Act namely:

ASIC has reason to believe that the person is not a fit and proper person to: > > (i) Provide one or more financial services; or > > (ii) perform one or more functions as an officer of an entity that carries on a financial services business; or > > (iii) control an entity that carries on a financial services business;

6. Here, the respondent had regard to the matters in s 913BB(2)(a)-(j) of the Act, being matters which the respondent must have regard to in applying the provisions of s 920A(1)(d) of the Act.
7. In respect of s 913BB(2)(k) - any other matter ASIC considers relevant, the respondent found:[33]

(a) Mr Petrovic's non-compliances with financial services laws are numerous and involved a failure to provide adequate services to clients and the preferring of UGC's interests over those of clients. > > (b) At the hearing Mr Petrovic did not acknowledge that there were non-compliances, that he should not have treated the clients as only wanting execution advice or that it was incorrect for him to rely on UGC's information and instructions in the context of his legal obligations.

8. The delegate did not find the applicant stood to gain from recommending investments in GCFP and Pivotal. However, the respondent said this did not diminish the findings about the applicant's non-compliance with the financial services laws.
9. Thirdly, the respondent found the applicant was likely to contravene a financial services law. This finding related to s 920A(1)(f) of the Act.
10. The reasons given were as follows:[34]

320. As shown above, Mr Petrovic: > > (a) has not complied with laws applicable to providers of financial services; > > (b) has not maintained the high standards expected of a provider of financial services; > > (c) does not know or understand the duties and obligations imposed by the Corporations Act 2001 on a provider of financial services; and > > (d) lacks the necessary knowledge, professional skills, judgement and integrity to provide financial services. > > 321. Importantly, at the hearing Mr Petrovic did not acknowledge that there were non-compliances, that he should not have treated the clients as only wanting execution advice or that it was incorrect for him to rely on UGC's information and instructions in the context of his legal obligations. This shows that his views about the applicability of financial services laws most likely continues to be as they were when he engaged in the conduct that constituted the above non-compliances with financial services laws.

1. The Reasons stated that the power to make a banning order were "enlivened under each of s920A(1)(e), s920A(1)(da), s920A(1)(d) and s920A(1)(f)".[35]
2. In exercising the power, the delegate had regard to

(a) ASIC's Regulatory Guide number 98 titled 'ASIC's powers to suspend, cancel and vary AFS licences and make banning orders' (RG 98); > > (b) ASIC's role as set out in s1(1) of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act); and > > (c) The objects of chapter 7 as set out in s760A.

3. Having noted various character references provided on behalf of the applicant, the respondent said "they do not alleviate the above adverse findings concerning Mr Petrovic". Further, in relation to the character references and annexures to his submissions, the delegate said they "do not concern the period Petrovic was an authorised representative of UGC".[36]
4. The delegate also rejected a submission that Mr Petrovic had reasonably relied on UGC's information and instructions, that the conduct "occurred at a time where there was prevailing uncertainty in the industry around the provision of limited advice" and that "a banning was unnecessary to protect investors and consumers given the conduct of concern has now ceased and having regard to Mr Petrovic's extensive qualifications, his good character, audit record and small number of client complaints". Of these matters the delegate said:[37]

There were breaches and it was not reasonable to prefer UGC's information and instructions over the obligations set out in financial services laws. As yet Mr Petrovic has not acknowledged his non-compliances.

5. Otherwise, the delegate continued, a banning order would not prevent the applicant from working in a non-financial services environment.[38]
6. Having referenced ASIC's RG 98, which the respondent said suggests a range of 3 to 10 years is appropriate where there has been a contravention of s961B(1), 961G, 961J(1) and misleading conduct, the delegate accepted the applicant's submission that ASIC had not alleged:[39]

(a) Mr Petrovic preferred his own interests to those of his clients; > > (b) Mr Petrovic sought personal gain from the alleged conduct; > > (c) Client loss; > > (d) the Clients, or indeed any clients have made any complaint to ASIC; > > (e) Mr Petrovic had acted other than in accordance with his licensee's information and instructions'.

The submission is correct though it remains the case that: > > (a) there were breaches of financial services law that, when they occurred, had the potential to adversely affect clients; and > > (b) Mr Petrovic acted in accordance with UGC's information and instructions rather than in accordance with financial services obligations.

8. Consequently, the respondent determined that a banning order should be for a period in the middle of the range and fixed that period at 6 years. In doing so, the respondent rejected the submission that it should be limited to retail clients. Here, the respondent said:[40]

Mr Petrovic has not acknowledged his non-compliances. Accordingly, there is a risk that Mr Petrovic will engage in like conduct if he is: > > (a) interacting with clients of a holder of an Australian financial services licence; > > (b) controlling, and hence potentially governing or effecting the governance of, a holder of an Australian financial services licence; or > > (c) governing a holder of an Australian financial services licence.

1. The proceedings were heard for 3 days from 30 June 2025 until 2 July 2025.
2. Each party was represented by Counsel, Ms Cameron appearing for the applicant and Ms Bentley appearing for the respondent.
3. The following documents became evidence in the proceedings:

(a) an agreed tender bundle (tender bundle/TB) consisting of the following; > > > (i) documents provided pursuant to s 23 of the Administrative Review Tribunal Act 2024 (Cth) (T documents/TD) and > > > > (ii) a folder marked "Parties Agreed Bundle" (agreed bundle/AB); > > (b) Exhibit A - statement of Mr Petrovic affirmed 23 May 2025; [41] > > (c) Exhibit B - document entitled Vanguard High Growth Index Fund; > > (d) Exhibit C - statement of Louis Van Coppenhagen dated 22 May 2025: > > (e) Exhibit D - UGC Organisational Chart as at September 2020: > > (f) Exhibit E - training video dated 14 July 2021 and transcript excerpt; > > (g) Exhibit F - Excel spreadsheet ending in file identifier 0108.

4. In respect of the documents, I note the following:

(a) Exhibit E was named Exhibit D by the Tribunal. However, an error in the marking of Mr Van Coppenhagen's statement which was corrected to Exhibit C necessitates that the training video be renamed Exhibit E. > > (b) Similarly, an adjustment is required to mark as Exhibit F the Excel spreadsheet ending in identifier 0108 which was originally named Exhibit E. > > (c) The agreed bundle included the parties SFICS and the applicant's reply to the respondent's SFICS.

5. The following documents were marked for identification:

(a) MFI 1 - Electronic Investment Spreadsheet Q2X.0017.0001.0108 which was not reproduced in the tender bundle; and > > (b) MFI 2 - Reporting Lines Document.

6. Each of the parties also provided an outline of submissions, both dated 20 June 2025.
7. Only the applicant was required for cross examination, the respondent deciding on day 3 that the cross examination of Mr Van Coppenhagen was not necessary.[42]

1. Mr Petrovic was affirmed, confirmed his statement dated 23 May 2025 (May statement) - Exhibit A, and was cross examined.
2. An earlier statement of the applicant, affirmed 26 March 2025, was not tendered and not relied upon.
3. In his May statement, the applicant gives evidence that he thought he was acting lawfully but now understands the UGC business model and his work in implementing that model "did not meet the requirement to act in the best interest of the client" and that he "made an error of judgement in relying on the instructions and advise of UGC".[43]
4. In his statement, the applicant refers to the training he received from Mr Van Coppenhagen and his role in providing what was called "limited financial advice". He explains the UGC business model for providing limited advice.
5. The applicant also provides evidence concerning working "nearly 8 years as a financial advisor" and his satisfactory performance thereof.[44]
6. As to the UGC business model, the applicant says:[45]

I understand now that Joel [Hewish] may have been acting on incorrect legal advice regarding UGC's business model, in particular employing advisors in 'execution only' roles such as mine.

7. As to any sanctions, the applicant says he is willing to undertake further training and be supervised for a period of time if the banning order is reduced. Otherwise, he provides evidence concerning the impact of the banning order upon him and his family and its likely future impact, including the possibility it may prevent him from becoming a licensed real estate agent or a lawyer and to meet the fit and proper person requirements of those roles and that other employers may be hesitant to hire him where he is required to deal with clients.[46]
8. In cross examination, the applicant gave evidence of the training he received from Mr Van Coppenhagen and what he was told concerning the UGC business model. His evidence included the following exchange:[47]

MS BENTLEY: And when you started at UGC, who was your direct supervisor? > > MR PETROVIC: Louis Van Coppenhagen. > > MS BENTLEY: Okay. And what kind of training did you receive, when you started? > > MR PETROVIC: I shadowed Louis for a couple of days, and then basically it was left to my own devices. > > MS BENTLEY: And when you shadowed him, what did you observe him doing? > > MR PETROVIC: I mean there was - it was very structured, in terms of the scripts that were used. So I sort of, saw him go through the, you know, the process I guess, that was in the structure of the scripts that I was given. There was some training videos as well. Again, it was quite sort of systematic, in terms of the things that you needed to cover off. I was told that UGC had legal advice, as to the process that they were following, so it was quite important that I had to sort of, you know, make sure I went through all the - all the areas that needed to be covered off. > > MS BENTLEY: All right. You said, after the initial training, you were left to your own devices. Did you have any ongoing supervision, by Mr Van Coppenhagen? > > MR PETROVIC: I believe that was part of his role, yes. Everything was recorded, you know, all the documents. Like, everything was saved in the system, so yes, I guess he was able to go back and have a look or listen to my calls. And from time to time, yes, I did get, like additional training. > > SENIOR MEMBER: Could I just ask this - were you provided, Mr Petrovic, with a copy of that legal advice that you referred to? > > MR PETROVIC: No. > > SENIOR MEMBER: Did you ask for it? > > MR PETROVIC: No. I don't think it was - yes, I mean, I, you know, was a - a junior employee at the time. I didn't see it as my place, as to start asking - the legal advice that the company director was - was getting. > > SENIOR MEMBER: Were you told what the advice was about, and what it said - what the effect of it was? > > MR PETROVIC: In general terms, yes. And in a lot of meetings, the director would, again, refer back to the legal advice. The lawyers would come into our office, as well. They would conduct reviews, they would question us into the business model, what was our understanding. So there was, you know, I did meet the lawyers, through James Hope. And he was quite, like he was a partner of his legal firm. So he sounded like he was, switched on guy in financial services, been operating in the industry for a long time. So I took comfort in meeting him, and you know, discussing it. But I didn't get - go through the paperwork, in specific details on the legal advice that he was providing Joel. > > SENIOR MEMBER: Did they tell you what the advice was for - or what the effect ‑ ‑ ‑ > > MR PETROVIC: Yes. It was to remain compliant, to make sure that we're not doing any, you know. The way their clients were referred to us, the process that we were taking them through, I guess, in the limited advice space. Just to make sure that everything was done compliantly. > > SENIOR MEMBER: When you say, the 'limited advice space', so it was given in connection with limited advice, was it? In other words, it was about how to go about giving advice in the context of what this dispute's all about. > > MR PETROVIC: Correct.

9. The applicant also gave evidence concerning him training others, such as Mr Stephen Rogers, and his role as team leader.[48]
10. As to his use of the UGC business model, the applicant said there would have been more than 50 clients, each of those dealt with in the same manner using the same information, scripts and process as was used for the clients referred to in the Reasons. Again, the product those other clients were investing in was GCPF.[49]
11. Of the GCPF investment and whether the applicant was aware the prospectus described the fund as being a highly speculative investment, the applicant said "I don't think I did, no"[50]. As to the rate of 13% return per annum, noted in the prospectus as being "aspirational", the applicant was asked the following questions:[51]

MS BENTLEY: Okay. Do you accept that it wasn't appropriate for you to use the 13 per cent figure in the benefits analysis table, because there was no reasonable basis to believe the fund would actually achieve that, year on year, for a 10-year period? > > MR PETROVIC: No. Like I said, it was a - like, it seems like a conservative amount, at the time, for property development, which is, were highly profitable. > > MS BENTLEY: Do you accept that it's potentially highly profitable but also may incur significant loss? > > MR PETROVIC: Yes. Correct. > > MS BENTLEY: So how did you factor in that potentially for significant loss, in your benefits analysis table? > > MR PETROVIC: That's a crazy question to even assume, because how would I factor in with industry fund, a GFC occurring? Like, there's no way of me being able to predict the future of what's going to happen in financial markets. > > MS BENTLEY: But if you have a fund that is targeting 13 per cent, but it is a highly speculative product, do you think that that ought to factor in, to whether or not you suggest, that the fund will earn that, year on year, for 10 years? > > MR PETROVIC: I - like I'm saying, the directors had track records of the results. So it wasn't like it was a completely new fund, with new people, that were new to the industry of property development, that didn't know what they were doing. So I took comfort that Brett had been involved in property development for a long time, that Joel had been, as well, and that Mr Pappas was, as well. That they'd had - did multiple projects, in the past. It wasn't through this type of fund, or structure. So I didn't see it as such a high risk. If like, yes, like if some - like a new fund started, with new people, that were new to property development, had no idea what they were doing - would be a very different story. I'm sorry. > > MS BENTLEY: So you said at - go on a bit? > > MR PETROVIC: No. > > MS BENTLEY: You say, 'I didn't see it as a high risk'. And we've already seen that the prospectus? > > MR PETROVIC: As high risk, sorry. > > MS BENTLEY: High risk. Okay. Because the prospectus itself, describes it as highly speculative - or to use other words, risky? > > MR PETROVIC: Yes. > > MS BENTLEY: You seem to have chosen not to accept the statement that it's risky, but you have chosen to accept the 13 per cent. Why do you take some information from the prospectus and discount the other? > > MR PETROVIC: I never said, it wasn't risky. > > MS BENTLEY: So how did you factor that risk in, to the benefits analysis? > > MR PETROVIC: Well, I - they didn't. > > MS BENTLEY: When you say, 'they didn't', who were you referring to?‑‑‑ > > MR PETROVIC: Well I guess, the - with the paraplanners, so yes, there was no - I mean, when - even when I worked at previous organisations, it was generally, you'd compare returns - or, you know, projected returns - that there wouldn't be a - a denominator for risk - preparing different risks, specifically - in terms of the amount. > > MS BENTLEY: And it was the paraplanners who prepared the benefits analysis tables. Is that correct? > > MR PETROVIC: Correct. > > MS BENTLEY: And did you review them, after they were provided to you? > > MR PETROVIC: Correct. > > MS BENTLEY: And did you turn your mind to whether or not, you were comfortable with the information that was in there? > > MR PETROVIC: Yes. I was comfortable, at the time. > > MS BENTLEY: Are you comfortable, now? Do you maintain that they were reasonable? > > MR PETROVIC: No. Now, I mean, after everything what's happened, no. I wish I didn't start working at UGC.

12. As to whether the clients had received comprehensive advice, the applicant said he knew they had not. He also said he had offered the option, but the client did not want to incur the additional cost.[52]
13. As to the analysis done by the paraplanners, the applicant accepted that the statement of Mr Van Coppenhagen was correct, namely:[53]

"Although the paraplanners wrote the draft SOAs, it was made clear, that they were the advisors' documents. Miki [the applicant] had final sign off on what was in the SOAs. Advisors had to be diligent in checking to make sure the SOAs were accurate before signing them. I made it clear that it was the document, and then name went on it.

14. In relation to collection of information from clients, the applicant was referred to a sample of the UGC document entitled "Client Personal & Financial Details" found that TB 2070 and following. This document commenced:

This fact find is designed to help gather your relevant personal and financial information, and goals. We use this information, along with our discussions, to help develop a financial strategy that is suitable for your needs. Potential strategies and products may be discussed during the information gathering process.

15. This document was completed by the applicant and related to Client 2 in the Reasons. The applicant accepted that the document indicates it was for the purpose of providing advice regarding superannuation and strategies.[54] However, again the applicant said he relied on templates and documents which he was "told needed to be worded in a certain way to be compliant from the compliance team". In doing so, he said he considered what were his own obligations[55].
16. The applicant was also shown the covering letter enclosing a SOA to one of his clients which he had prepared.[56] He was asked the following questions.

MS BENTLEY: Can I get you, please, to go over onto 2104. You see about the third or so paragraph down starts with, 'Where it is apparent to us and to provide advice'? Do you see that bit? > > MR PETROVIC: Yes. > > MS BENTLEY: It says: > > Where it is apparent to us and to provide advice that is in your best interests, having regard to the engagement and your stated objectives, we will provide advice to you on financial matters and whether your potential objectives - > > First dot point - > > are in your best interests, are likely to put you in a better position, and have associated risks that have been appropriate considered by you. > > MS BENTLEY: Do you accept that suggests to the client that you will be providing them advice about whether or not what they're going to do - being setting up the super fund and investing in Global Capital Property Fund - is in their best interests? > > MR PETROVIC: Yes. I can see how that's confusing now. > > MS BENTLEY: It's confusing, isn't it, because you knew you wouldn't be providing advice in their best interests. Didn't you? > > MR PETROVIC: At the time, though - I think what I was saying to the client was very clear. And then the documents maybe didn't match up what I was saying, and that's, I guess - yes. It looks confusing now, sitting down, going through it word by word, piece by piece, I can see that it can be confusing. At the time, I didn't think it was, you know - misleading that - we were basically told that these needed to be in it to be compliant. > > MS BENTLEY: But it's not just this paragraph here that we're looking at that says you'll be providing advice in their best interests, is it? That's something you said to them during telephone calls? > > MR PETROVIC: Yes, that's correct. > > MS BENTLEY: You say to them a number of times in telephone calls and in this document that you will be providing advice in their best interests. Is that right? > > MR PETROVIC: That's right. > > MS BENTLEY: But do you accept that you knew that you weren't undertaking the exercise that you would need to undertake to provide them advice in their best interests? > > MR PETROVIC: No, I disagree with that. Some of these clients, like [Client 2 and Client 6], the benefit was, you know - $450,000 over a 10-year period. So a lot of these clients, like - over $100,000 was the threshold that we used to proceed with clients, so I thought it was in the client's best interest at the time. > > MS BENTLEY: When you say it's in their best interest, is that purely based on the number that's generated in the benefits analysis table by using the 13 per cent? > > MR PETROVIC: I mean, a number of factors. The fact that they are no longer in a - you know, in an industry fund that they had no communication with so basically, they felt like they didn't have anyone to speak to. So now they have some - you know, an organisation that they could get more comprehensive advice and they could get insurances and all these additional things. So it wasn't purely just one thing, but it was a large factor, yes, the benefit analysis. But I'm saying there was additional auxiliary benefits to that - yes, I thought clients were receiving. > > MS BENTLEY: But really, the benefits analysis is just looking at what could potentially happen if they follow this particular course, being setting up the self-managed super fund and investing in that product, isn't it? > > MR PETROVIC: Correct, yes. > > MS BENTLEY: There's no analysis of any other possible investment that could achieve their goals, for instance? > > MR PETROVIC: No, but because we weren't giving investment advice. > > MS BENTLEY: But do you recognise that what you're suggesting to them is that you will be assessing whether or not what they're doing is in their best interests? > > MR PETROVIC: Yes.

17. I note from the above answers, that the statement about acting in a client's best interests was not confined to the written documents, but was also something Mr Petrovic told his clients when speaking to them on the telephone.
18. Later in his evidence, the following exchanges occurred:[57]

SENIOR MEMBER: Ms Bentley, do I understand from the way you're putting it it's this: an investment is recommended by somebody, not your company. A person turns up and says, 'I want to invest in that.' You say to satisfy your financial analysis requirements - you compare that investment that they've told you they want to invest in with their old investment. In doing so, I understand the effect of your evidence is you accept everything that you're told about that investment and its performance and do a mathematical calculation. Is that, effectively, the extent of the analysis? > > MR PETROVIC: Yes. I mean, that is the analysis, but then in turns (sic) of the fact find document, asking those questions, whether they were comfortable, you know - going from shares into property development; increasing the concentration - like, I guess that's a bit of an analysis as well, but not like a quantitative one. > > SENIOR MEMBER: Why do you bother to look at the prospectus if you make those assumptions that they already want to invest? You said a bit earlier, you look at the prospectus. You gave some evidence you have a read through that. Why do you do all of that? > > MR PETROVIC: I think just to get an understanding of what the product is. > > SENIOR MEMBER: Why? > > MR PETROVIC: I guess maybe I didn't have to, but I just ‑ ‑ ‑ > > (Audio malfunction.) > > SENIOR MEMBER: I'm just trying to understand why you did this and what at the time when you were doing you thought were the outcomes of your enquiries? > > MR PETROVIC: Well, I think it was to get an understanding and be comfortable with what the investment is as well, because, you know - I didn't want people to be going into, you know - a fund that was going to, you know - if it was going to be completely terrible and lose everyone money > > SENIOR MEMBER: Does that mean you understood that your role included looking at it at least to satisfy yourself that it wasn't investing in a $2 company? > > MR PETROVIC: Yes. > > SENIOR MEMBER: Thank you. > > MS BENTLEY: If you were providing execution only services in respect of setting the self-managed super fund and placing the investments, why did you provide these clients with a statement of advice? > > MR PETROVIC: Because there's other areas that we provided advice on. > > MS BENTLEY: But why did the statement of advice deal with the setting up of the super fund and the specific products? > > MR PETROVIC: If you scroll up on your document there, it states what advice we'll provide in. How to best roll over the money from your existing super fund, a review of the beneficiaries and insurances. > > MS BENTLEY: But you'd accept, wouldn't you, that the statement of advice goes further than that to include, for instance, the benefits analysis table? > > MR PETROVIC: Yes, I was told that that was just a precaution. So it wasn't even necessary for us to include in the SOAs but to cover our obligations more thoroughly to include it. So we weren't following clients' instructions blindly and there wasn't going to be a material benefit. > > MS BENTLEY: Do you accept that including the benefits analysis table in there led the clients to believe you had done an assessment as to whether it was in their best interests and you did believe it to be? > > MR PETROVIC: Yes, I mean, that's why we did it for as well. > > MS BENTLEY: What's your understanding of what your obligations are as a financial advisor to act in the best interests of a client in providing advice? > > MR PETROVIC: I mean, it is to - you know, follow the safe harbour provisions, ascertaining what the clients' needs are, you know - what they're wanting to achieve. Going through different, I guess, scenarios and then solutions for them as well. You know, asking more questions to uncover if there is a greater need for things, you know. > > MS BENTLEY: Do you accept here that you didn't do that for these clients? > > MR PETROVIC: I could have done it better, in hindsight, but - yes, at the time, like - I did offer those things and we did run through it was well.

19. The applicant also gave evidence that, at the time he was advising clients, he understood the safe harbour provisions but thought he met those requirements in the context of the UGC business model of limited advice. He now understands differently, saying that he is now of the view that it is not possible to give limited advice and comply with the regulatory obligations. In doing so, he now accepts that the advice he was required to give was not limited.[58]
20. I note the position adopted by the applicant in giving this evidence concerning the possibility of giving limited advice, appears different to the position adopted in his submissions to the delegate of ASIC.[59]
21. Finally, in respect of Client 2, the applicant gave the following evidence:[60]

MS BENTLEY: And do you accept that you failed to advise her that if she followed this course, she still would not achieve her goal of retiring at 65 with $1 million, which was her stated goal? > > MR PETROVIC: Yes, I accept the fact that the template of the fact find was, I guess, confusing, and could be misleading that - I don't know why we're asking more information than we were required. I know now. I guess maybe to confuse clients and mislead them, I guess. Yes. > > MS BENTLEY: And do you accept you failed to conduct a reasonable investigation into the financial products that would meet her goals and her financial situation and needs? > > MR PETROVIC: Sorry, the question? > > MS BENTLEY: Do you accept you failed to conduct a reasonable investigation into the financial products that might meet her goals, financial situation and needs? > > MR PETROVIC: Like I said, I wouldn't have taken her on as a client in the first place. Like, I don't think you can limit the scope and not do it properly. > > MS BENTLEY: Should I take that as you do accept that you didn't conduct a reasonable investigation into the financial products? > > MR PETROVIC: Yes. > > MS BENTLEY: And do you accept you failed to identify her relevant circumstances by failing to adequately assess her risk profile and identify any of her investment experience? > > MR PETROVIC: Yes. > > MS BENTLEY: And do you accept you failed to base all judgements in advising Client 2 on her relevant circumstances? > > MR PETROVIC: Yes.

22. At the commencement of day 2 of the hearing, 1 July 2025, the applicant made a statement in circumstances where he said "I have had time to think, overnight, in terms of my position".[61] He continued:

I guess, and maybe, I guess, clarify my position. And it might, you know, eliminate some of the multitude of questions. I was misled by UGC, which in turn - like I was misled by my employer, which in turn, then I misled clients - inadvertently. It wasn't something that I did intentionally, at the time, but I can see now, that - how it can be misleading. Like, I've never experienced or been in a position, that I needed to second question - you know - business practices, or templates. I've worked for about 10 different organisations, in the past, and this is the first time that, yes, I've had to experience this. And I guess, in terms of how I even started at UGC - at the time, maybe I didn't feel like it was my place, as well, to question those things. ...

23. The applicant was cross-examined about this statement and the following exchanges occurred:

MS BENTLEY: It might help, and I appreciate the clarification. You started by saying, you were misled by UGC, and that caused you to mislead the clients? > > MR PETROVIC: Yes. > > MS BENTLEY: In what ways do you accept that you misled the clients, even inadvertently, what did you do, that was misleading for them? > > MR PETROVIC: Well, I'm saying, all the documentation - the statements that were in the documents, the scripts that were used. > > MS BENTLEY: What about the use of the 13 per cent? Do you think that, in hindsight, that was misleading? > > MR PETROVIC: I - there was a basis for that, so I don't agree with that, there was no evidence - like absolutely no evidence to support that. There was actually a calculation made, that showed what they were targeting. I mean I could provide that, if I had - I thought that was already in all the documentation. But it was quite clear, how they actually came to the 13 per cent.

24. In giving these answers, the applicant indicated he felt he could not challenge UCG in relation to the documentation used[62] and that he formed these views "at the very start, of just having - reviewing all the documentation that [UCG] were using.[63]
25. The applicant was cross-examined about the services provided to other Clients referred to in the Reasons and the advice given to them. One was Client 6.
26. Unlike the five other Clients identified in the Reasons, it would appear Client 6 sought to place the majority of her funds (84%) in a fund known as UGC - Platinum Alpha Direct Fund (Platinum Alpha Fund), not GCPF.
27. The applicant was asked questions concerning various documents provided to Client 6 including answers in a document entitled Risk Tolerance Questionnaire.[64] Question 6 of that questionnaire and the answer provided was as follows:[65]

6. My preferred strategy for managing investment risk is: > > I don't understand the definition of "investment risk". I rely on my financial adviser to achieve this.

Of this answer, the applicant was asked the following questions:

MS BENTLEY: If we scroll down, please, to page 3928, do you see point 6 there, 'My preferred strategy for managing investment risk'? > > MR PETROVIC: Yes. > > MS BENTLEY: And she's ticked the box to 'I don't understand the definition of "investment risk," I rely on my financial advisor to achieve this'? > > MR PETROVIC: Yes. > > MS BENTLEY: So do you accept that [Client 6] did not have an understanding of risk? > > MR PETROVIC: Correct. > > MS BENTLEY: And that she was relying on you to provide her advice about that? > > MR PETROVIC: Correct.

The next page of the questionnaire included question 8 which was answered as follows:[66]

8. Which of the following best describes your understanding of the investment market? > > My awareness of the financial market is limited to information passed on by my broker and financial adviser. I rely on the professionals to keep me updated.

Of this answer, and the subsequent SOA said to be "Prepared by Miki Petrovic"[67], the applicant was asked the following questions:[68]

MS BENTLEY: And then at point 8, which is at 3929, under 'Which of the following best describes your understanding of the investment market?' She says her 'awareness of the financial market is limited to information that is passed onto her by a broker or a financial advisor,' and she, 'relies on professionals to keep her updated.' Do you see that? > > MR PETROVIC: Yes. > > MS BENTLEY: All right. And then following the fact find and the risk tolerance questionnaire, you provided [Client 6] with a statement of advice. That's at T8.06, which starts at 3960. All right. Now, again this is a reasonably long document, but the investment recommendation that you make to her is at 3972. And you see there - and I'll summarise what my understanding of what this table says, and correct me if I'm wrong - but is it right that you are saying to her to completely get out of First Guardian and then to put $360,000 in to United Global Capital Premium Alpha Direct Fund, and the total of that can be found at the bottom of the table at 3973? > > MR PETROVIC: Yes. I see that. > > MS BENTLEY: And so you accept that that was the advice you were providing to her? > > MR PETROVIC: Yes.

Of the SOA relating to Client 6 and whether it included analysis of any past or prospective performance of her existing fund and the Platinum Alpha Fund, the applicant said that analysis was done.[69] The cross examination continued:[70]

MS BENTLEY: All right. Do you accept that there's nothing in the statement of advice which sets out that consideration? > > MR PETROVIC: Yes. They don't put down their returns for some reason. It was the thing that we did, I guess, to specifically have returns, I guess charted. Once we do - for some reason, once we did a comprehensive advice whenever we had recommendations for investments, we didn't have, you know past performance and - yes. > > MS BENTLEY: Okay. So you only looked at the prospective benefits when you were doing the execution only advice? > > MR PETROVIC: The template - that's how the template was done. Correct. > > MS BENTLEY: All right. And you accept, I think from what we were talking about before lunch, that there's nothing in the statement of advice about the alternate investment strategies that you say you considered other than staying in her existing fund? > > MR PETROVIC: That's correct. > > MS BENTLEY: Given that there's nothing in there about the alternates that you've considered and the prospective or potential performance of those funds, do you think that you properly set out the basis on which the advice was given? > > MR PETROVIC: I think that this has put - showing a much better position because, I don't know if you know, but First Guardian is actually frozen, and they've got issues. So had I not given this advice, and had I not changed their investments, her $400,000 would have just been stuck, and she would literally have not had any ability to access it at all. > > SENIOR MEMBER: Could you now try and answer her question though? The question wasn't that. Ask the question again, please. > > MS BENTLEY: Your obligated to set out - do you accept that you are obligated to set out the information about the basis on which the advice is given? > > MR PETROVIC: Yes. > > MS BENTLEY: And do you accept that because the statement of advice does not address the alternate investments that you say you considered or any kind of prospective performance of the existing fund or alternate funds, you have not set out the basis of the advice in the SOA? > > MR PETROVIC: I think the advice working (sic) - the SOA wording could have been done better. But it doesn't mean that it didn't happen. > > SENIOR MEMBER: Where in the (audio malfunction) advice - what you're being asked about is to agree with or disagree with a proposition concerning what is in the document, namely, the statement of advice. The question was whether or not the statement of advice sets out all the information to which you have referred, namely, your consideration of alternative investment strategies other than in the existing fund and the one that was proposed? > > MR PETROVIC: No. There was other things that I considered. > > SENIOR MEMBER: Does that mean that you agree with the question that was asked originally - sorry, the question then that you were asked originally was, 'Did you set out all of that information and the basis for your advice in the statement of advice'? Is the answer to that yes or no? > > MR PETROVIC: I think it's no, because the SOA could have been worded better to include more detail about that.

As will be evident from these answers and others which I have set out above, the applicant was reluctant to answer questions directly concerning his own conduct and sought to focus attention upon the authors of the template documents which he used even though he was responsible for reviewing documents prepared by the paraplanners and providing the final signoff of the documents before they were provided to his clients.

1. At the hearing, the applicant provided a document entitled "Applicant's position on alleged breaches" (Position Statement). That document stated:

Applicant's position on alleged breaches > > The following applies for each of the Relevant Clients. > > Accepts breached s 961B(1)

• Failed to identify the subject matter of the advice sought
• Failed to conduct a reasonable investigation into the financial products that might meet the relevant clients' goals, financial situation and needs
• Failed to identify the objectives, financial situation and needs of the relevant clients that would reasonably be considered as relevant to the advice sought on the subject matter because he failed to adequately assess his risk profile and identify his investment experience
• Failed to base all judgments in advising the clients on their relevant circumstances
• Mr Petrovic's breach was a direct result of his reliance on UGC's instructions which were reasonable for him to follow at the time.

• Accepts provided advice when it was not reasonable to conclude it was appropriate for the relevant clients in breach of s 961G but the basis for admitting this is not for the reasons at 96 (a)-(e) of the delegate's decision.
  • The reason he accepts 961G was breached was because, in following UGC's limited advice model, he had not satisfied the duty under s 961B which included that he had not identified the client's objectives, financial situation and needs that would reasonably be considered as relevant to the advice sought, therefore he lacked a reasonable basis to conclude that the advice was appropriate to the client.
  • The core problem is that, due to the limited advice model, each of the Relevant Client's appetite and tolerance for risk was not assessed. That is the reason why it was not reasonable to conclude it was appropriate for him in breach of s 961G.
• The reasons for the delegate's decision at 96(a)-(e) do not necessarily support a finding that s 961G was breached:
  • The matters the delegate has put at (a)-(e) proceed on the assumption that the client did not have a high risk tolerance when his risk tolerance has not been assessed.
  • The fact that the fees were higher doesn't necessarily mean it was not appropriate.
• Mr Petrovic's breach was a direct result of his reliance on UGC's instructions which were reasonable for him to follow at the time.

• The only sense in which Mr Petrovic breached s 961J is that he worked for UGC during the period of time that it had a limited advice team and therefore helped clients place their chosen investments without enough information to know whether this was right for them.
• Mr Petrovic accepts this was a breach of s 961J for the relevant clients identified by ASIC where the chosen investments were UGC related in that UGC received a known benefit whilst there was not enough information about the client to determine whether the investment was in clients' best interests.
• Does not accept that the propositions at 100(a)-(e) are sufficient to establish the delegate's conclusion that Mr Petrovic breached s 961J(1)
  • Ie. even if all propositions at (a)-(e) were accepted, these would not provide sufficient basis to make out a breach of s 961J(1).
• This is for the same reason explained above for 961G:
  • the fact a client has taken on more risk and higher fees doesn't necessarily mean the client won't benefit from the higher targeted returns.
  • Likewise the fact that UGC will benefit doesn't mean that the client won't also benefit or that UGC's interests were prioritised over the client's.
• Mr Petrovic's breach was a direct result of his reliance on UGC's instructions which were reasonable for him to follow at the time.

• Accepts that the statements in the scripted phone calls and the SoAs were objectively confusing.
• Admitted that, whilst it was not his intention to confuse his clients and he believed they understood the scope of the engagement they had paid him to provide, he can see why someone might have been misled by some of the wording.

Contests Section 952E(2) and relies on the defence in s 952E(4)

• The defects and information identified that could be misleading were all parts of the script and templates that Mr Petrovic was required to use based on his instruction and training as part of company procedure.
  • If it was misleading it was because of the way the template SoA and scripts had been drafted based on compliance and legal advice about what needed to be in the scripts and documents to comply with the law.

1. The Applicant is not contesting that ASIC's power to make a banning order was enlivened. He is now aware that the execution only advices he gave in the Statements of Advice that ASIC has referred to in the Reasons breached the best interests duty and that it was not reasonable to conclude that the resulting advice was appropriate to those clients. He notes that each of the clients referred to in the Reasons (Relevant Clients) was referred to him by his employer, UGC, because the Clients had requested limited advice only. He accepts that he made an error of judgment in his reliance on the instructions and advice of UGC, believing that his role was legal and that UGC had obtained legal advice confirming the legality of the UGC business model. He notes that each of the SOAs in the Reasons were made prior to October 2022, when his employer UGC changed its practices after ASIC notified UGC of its concerns.
2. In mitigation, the Applicant says that he acted in good faith. He submits that his faith in the advice and instructions of UGC regarding the limited scope of his role does not demonstrate incompetence or irresponsibility. This was because many advisers in the financial services industry believed at that time that providing limited financial advice of that nature was permitted by the Act and ASIC's Regulatory Guidance.
3. The Applicant submits that a banning order of 6 years is excessive and would have a punitive effect - being so long as to irrevocably destroy his career in the financial services industry. Rather, he submits:[71]

that the appropriate decision is for the Tribunal to make a banning order against him of a duration of less than 3 years and limit its scope to allow him to work in the financial services industry, but not in any role providing personal financial advice to retail clients.

4. As to the matters to be decided by the Tribunal, the applicant makes the following submissions:[72]

5. Mr Petrovic submits that, once he has conceded that the power under s 920A is enlivened on the basis of one or more of the gateway provisions under s 920A(1) being met, it is not necessary for the Tribunal to determine whether every other alleged ground to make an order under s 920A(1) is satisfied. This distinguishes the task of the Tribunal in this present review from a case where the applicant has made no admissions and accepted no responsibility, forcing the Tribunal to decide every contested ground to determine whether any of the s 920A(1) gateway provisions are met. > > 6. Mr Petrovic has admitted that he has breached certain financial services laws so that the gateway under s 920A(1)(e) has been met. He submits that, because the object of a banning order is not punitive, it is not necessary for the Tribunal to determine whether Mr Petrovic has breached all of the financial services laws that ASIC contends in order to determine the appropriate scope and duration of the banning order. > > 7. Mr Petrovic respectfully submits that the other gateway provisions that ASIC alleges are only relevant to this review in terms of reviewing the underlying circumstances to the extent necessary to inform the risk assessment described below (specifically whether Mr Petrovic is likely to contravene a financial services law in the future, whether he is a fit and proper person, and whether he is competent to provide financial services).

5. On the issue of risk, the applicant makes submissions on the issues of competency, fit and proper person and likelihood of contravening in the future.
6. The applicant says a competent employee "working as a junior financial adviser" would not have rejected their employer's instructions and procedures for providing limited advice in the circumstances of this case".[73]
7. The applicant says there was industry uncertainty concerning the interpretation of Regulatory Guide 244 (RG 244). While the applicant accepts the respondent's interpretation in its SFICS is the correct interpretation, the applicant says "without INFO 267 for clarification, a non-lawyer reading RG 244 in the way described in the Applicant's SFIC would not demonstrate incompetence to provide financial services". The need to issue INFO 267 supports this view.
8. The applicant continues:

28. The engagement and scope set out in the template SOA, specifically stated UGC had been engaged to assist the clients establish their SMSFs, rollover their super, and place their intended investment. It then noted, in the course of assisting with this Engagement, he would provide advice on how best to rollover, a review of the client's superannuation beneficiaries, and a review of the client's insurance. It then specifically noted that he had not been engaged to provide advice on whether an SMSF was appropriate, and whether the chosen investments were appropriate. > > 29. Based on this, Mr Petrovic believed he was assisting clients set up their SMSF but not providing any advice on it. He was providing advice on the related issues of insurance and beneficiaries though.

9. As to fitness and propriety, the applicant says it would not have been apparent to any employee at the time that the instructions and templated SOA which UGC provided were illegal. Reliance is placed on his written statement that he acted in good faith and did not intentionally breach financial services laws. In this regard the applicant says ASIC "has provided no evidence to support any inference or conclusion that Mr Petrovic knowingly breached financial services laws when he followed UGC's instructions".[74]
10. Insofar as fitness and propriety relate to his competence, the applicant submits his more recent advices prepared later in 2022 until UGC went into voluntary administration demonstrate his competence. Reference is made to Annexure MP-2 to the applicant's statement.
11. Reliance is also placed on the evidence of Mr Van Coppenhagen concerning his work as a financial advisor and that of Ms Russell who describes the applicant as honest and reliable. Neither of these witnesses was required for cross examination by the respondent.
12. As to likelihood of contravention in the future, the applicant relies on his previous employment history and the fact that there have been no allegations or findings against him that he has breached financial services laws.
13. I note his employment history suggests the applicant had worked in the industry for approximately 4 years prior to commencing with UGC, and as at 2025 in excess of 8 years.
14. As to events while at UGC and after, the applicant says he ceased providing limited advice in about October 2022 as UGC had changed its business model. This was prior to the applicant receiving any notice from ASIC. The applicant says contraventions were "isolated to a period when he was employed by UGC in a limited advice role at a time where there was industry uncertainty as explained above".[75]
15. Finally, the applicant submits he has "acknowledged his previous errors of judgement and shown insight that demonstrates that he now understands his duties".[76]
16. In conclusion, in assessing risk the applicant submits no ban is required for protective purposes. This is because the low risk the applicant poses and the unlikelihood of any breach in the future.
17. As to the purpose of deterrence, the applicant says the existing ban has had a significant impact upon him and his employment opportunities, professional reputation and his family's income. The submissions continue:[77]

He has learned his lesson and will no doubt be more likely to question the instructions and procedures of any future employer in the financial services industry. Therefore, it is not necessary to impose a ban on Mr Petrovic longer than the ban that has already been in place in order to satisfy personal deterrence.

18. The applicant continues that the existing banning order of 6 years will "effectively end Mr Petrovic's career in the financial services industry", there being little difference between the existing banning order for the applicant and the 10-year banning order imposed for the director of UGC, Mr Hewish. In this regard, by the time he is eligible to re-enter the industry, his experience, skill and training will be long out of date.
19. In short, the need for specific deterrence has been addressed by the time served in respect of the current ban.
20. In relation to general deterrence, the applicant made the following submission:[78]

48. Mr Petrovic accepts that some banning period may be necessary to deter others in the industry from making the same error of judgment that he did. However, the Tribunal should be clear that for this purpose it is considering deterring other employees from following their employers instructions if, for example, there was reason to believe that those instructions did not comply with financial services laws. It may also be relevant to deter employees from not making their own inquiries or failing to maintain their knowledge of all applicable financial services laws. > > 49. This is very different to the period of ban that would be appropriate for a company director in order to send a message to other such company directors who may be tempted to devise a business model that subverts the law. > > 50. In terms of deterrence aimed at company directors and leadership, a number of people in the financial services industry may be aware of the fate of UGC following its going into liquidation and ASIC taking enforcement action against it. They may also be watching what happens to its director, Mr Hewish after ASIC's media release that they had issued a 10 year banning order against him which was also picked up and reported on several financial news websites. As ASIC notes in its media release of 31 July 2024 announcing Mr Hewish's banning order, Mr Hewish "was involved in UGC's conduct as its responsible manager and key person under the licence". > > 51. The deterrence value of the banning order and any other regulatory action taken against UGC, its director and senior management are what provides general deterrence for company directors. The length of any banning orders made against UGC's employees such as Mr Petrovic should be appropriately balanced to provide deterrence to those at the employee level. > > 52. Mr Petrovic respectfully submits that a ban against providing financial advice to retail clients for a duration of less than three years is appropriate to fulfil the general deterrence purpose in the context of an employee who made the mistake of not undertaking their own inquiries when following an employer's instructions.

21. As to factors of mitigation and parity of sanctions, first the applicant refers to Table 3 of RG 98. The applicant submits his conduct was a result of carelessness, that he has attempted to remedy the contraventions and there is no alleged client loss. As such, a ban of less than 3 years is appropriate.
22. Next the applicant says ASIC conflated the conduct of Mr Petrovic with that of Mr Hewish and UGC when suggesting a banning order in the range of 3 to 10 years was appropriate. Again, the applicant says it was his superiors "who devise the business model that was inconsistent with the orderly operation of a financial market". He also says he did not set out to deliberately enrich himself.[79]
23. Finally, in respect of breaches of other financial services laws, the applicant says:[80]

Alleged breaches of other financial services laws > > 56. As explained above, for the purpose of determining an appropriate banning order, Mr Petrovic submits that it is unnecessary to determine whether Mr Petrovic has breached all of the financial services laws that ASIC has alleged given he has already admitted some of those breaches such that the s 920A(1)(e) gateway is met. > > 57. If the Tribunal considers it necessary to decide whether the Relevant SOAs were misleading or deceptive, Mr Petrovic refers to his reply to ASIC's SFIC in which he explains that: > > a. the SOAs contained clear information about what was in and out of scope for the advice; > > b. the SOAs contained a number of warnings; > > c. it was clear on the face of the benefits analysis table that the table was only comparing the client's current superannuation fund against their proposed investment; and > > d. Mr Petrovic was entitled to rely upon the 13% rate of return as stated in the Global Capital Property Fund's published Product Disclosure Statements pursuant to s 952E(2) of the Act.

24. In these circumstances, the applicant submits the preferable decision is a banning order of less than 3 years being one that permits him to work in the financial services industry, but not in the role of providing personal financial advice to retail clients.
25. Oral submissions to like effect were made by the applicant in closing submissions. In this regard, the following was said by Counsel for the applicant about contraventions of ss 961G and 1041H(1) of the Act:[81]

MS CAMERON: So I'll go back to the basis on which he accepts that there's been breaches, because I do think that's important to the understanding of position, now. So as has been put in that, I guess, aide memoir, that was handed up today, he accepts that - the advice that he provided - it wasn't reasonable to conclude that they were appropriate for the clients - in breach 961(g). And the basis for that, is because in following UGC's limited advice model, he had not satisfied the duty under 961(b), which included he had not identified the funds, objectives, financial situation and need that would reasonably be considered as relevant to the advice sought, therefore he lacked a reasonable basis to conclude that the advice was appropriate to the client. > > That's the reason why it's not the bare facts in themselves that the investment was speculative, or that there were higher fees. For some clients, it's possible that that might have been reasonable and appropriate. The problem was, he didn't have a full picture of their needs, because they were referred to him as limited advice clients, and therefore he didn't conduct the same process as what the company did, for comprehensive clients. And this same reasoning applies to 961(j). So what he said yesterday, he said - looking at the benefits analysis table that compared the existing fund to the new fund. > > He believed, for each of these clients, that they would be achieving a benefit, and the company had a minimum of, I believe, it was 100,000 over 10 years, in comparison to their existing fund, before it would execute the advice, to roll them over into the chosen fund. And so, he said, on that basis, he believed, at the time, what he was doing was in the clients' best interests. And the basis on which 961(j) is admitted - so he said all along, he acted in good faith. He thought he was doing the right thing. He thought that the clients were going to receive a benefit. > > And the fact that, again, they're exposed to more risk, or they'll incur higher fees, or that UGC will also receive a benefit, doesn't mean that he breached the obligation in relation to the conflict, but what he can accept, now, is that the chosen investments - because they were related to UGC, UGC definitely would receive a benefit, but there wasn't enough information to determine whether the clients - whether that was in their best interest. So for the reason that the best interest wasn't satisfied, and there wasn't enough information about their full situation, even though the benefit analysis table showed a benefit, that does depend on other things like risk posture, which wasn't analysed. > > So the fact that the only party there with a guarantee of having a benefit was UGC, not the client. But he really believed, at the time, that all these clients were going to receive a benefit and he didn't think he was taking a choice between, what would benefit UGC and what would benefit the clients. He thought both parties would benefit. In terms of 104(h)(1), he accepted, yesterday, that he can see when the statements were put to him, how someone might be confused by, why certain things were in the statements of advice, or why certain things were said in the call scripts - he can see now, how someone might have been confused. > > Again, he said he didn't ever set out to confuse people. He tried to explain things to people, he said. In fact, he said, he sent them a statement of advice and then he'd called them, before they got in confusion, and talked them through it, because he'd had circumstances where he knew that clients would read things and get confused. He was trying to stop confusion. But to a certain extent, perhaps he himself was confused, and it seems like even the people who designed these statements were confused, as to how to provide compliant, limited advice at a time when there was industry-wide confusion. > > And you can see that a benefits analysis table has been put in, and I can only speculate what the people in compliance might have been thinking, when they put that in. But if you give them the benefit of the doubt, you might think they thought, 'We have to comply with the best interest duty, in a circumstance where a client hasn't asked for a comprehensive advice. How can we make sure we're at least not putting them in a worse position? Let's do a benefits analysis between the current fund and the future fund'. I'm not saying that's right, but I'm saying, perhaps you can see the thinking behind whoever put the benefits analysis table into that statement of advice. I mean, there's an explanation for - - - > > SENIOR MEMBER: Does it matter if someone else put it in? It's his advice, ultimately, because he signed off on it, isn't it? > > MS CAMERON: It's ultimately his advice, because he signed off on it, but when you think - so you've been given a template by your employer. It includes scopes, it includes disclaimers, it includes tables. What basis do you have, to go into a template document and remove something like a benefit analysis table from that document, as an employee, when you know - sorry? > > SENIOR MEMBER: Okay. It's a bit like, though, saying, 'I've got an obligation to comply with the template to provide reasons', and lots of things might get, you know, in that sort of a template as a standard thing, but ultimately, it's my reasons, it's got to be the right thing. The starting point's what's your duty is to the client, isn't it - not what the template dictates? > > MS CAMERON: Yes. ...

1. In its SFICS, the respondent submitted the decision under review should be affirmed.
2. In light of the applicant's statement in the Position Statement, the areas of dispute for determination by the Tribunal narrowed.
3. One point of different was the extent of contravening conduct by the applicant and his culpability in relation to what occurred. Cross examination largely focused on the applicant and what he did.
4. This, in turn, resulted in the closing submissions of Counsel for the respondent focusing upon the conduct of the applicant in the context of the UGC business model. Ms Bentley said of the Position Statement:[82]

But I have a general understanding. It does seem that he wholly accepts, that he failed to comply with the best interests provision under 961(b); subsection(1), for the same reasons as found by the delegate. And I don't think, as a result of that, there's any need to address you any significant way on that, save to point out that acting in the best interests of the client, is what I would describe as one of the paramount duties. It's so critical, to the protection of the public, and it has to be viewed as one of the key obligations on a financial advisor. Then the next section, next provision that ASIC contends that Mr Petrovic breached, is 961(g), which is an obligation to provide advice that is appropriate to the client. > > And it assumes that, in preparing the advice, the advisor has complied with the bests interests duty, in 961(b). Mr Petrovic concedes, that he failed to provide advice that was appropriate to the clients, but his basis of his admission is different from that found by the delegate, or its more narrow, insofar as the reason he accepts it, is that he says, well, if I haven't complied with the best interests duties, by ascertaining a fulsome understanding of the client's personal and financial situation, and their risk tolerance, and so on, I can't possibly have provided them with advice appropriate to them, because I don't know what was appropriate to them. And that follows, and that's a proposition that ASIC agrees with, and has contended for. > > However, ASIC goes further than that - it's not simply a mechanical situation. What ultimately happened, is advice, we say, was provided. And 30 that advice, when having regard to the information that he did have, was not appropriate advice, because in each instance, he was recommending to these clients that they invest all, or almost all - and when I say almost all, it's usually well in excess of 80 per cent of their superannuation savings in a product which was highly speculative. And Mr Petrovic did concede in his evidence, that he didn't think it was appropriate, or he certainly doesn't think now, that it's appropriate. I should clarify that - he doesn't think, now, so he accepts, now, that investing in a single product, is inappropriate. > > And so he may not have thought it then, and so it might have not been an active decision, but certainly, he accepts now, that to get these clients to invest all of their super in a single product, was not appropriate. And we agree with that, particularly clients, here, a number of whom had a relatively low superannuation balance, such that there was the risk that it would be eroded by fees if the product did not perform as targeted, the fees were very significant.

MS BENTLEY: So it's ASIC's position that the advice that was given, was in and of itself, inappropriate advice, based on the information that had been obtained. But also, it wasn't advice appropriate to them, because he hadn't further found out other information, so it's impossible to say it was appropriate. > > SENIOR MEMBER: When you say, 'other information', what information? > > MS BENTLEY: Information about their risk tolerance, their investment experience, a fulsome understanding of their financial position - so a lot of these documents are very high - a lot of the information in the fact find is quite high level. There's no consideration of any alternate products, and how that might achieve their goals. And a number of occasions, there's been a conflation of the idea of a goal with a product, and so when asked, 'What's your goal', or 'What's your objective', the answer is, 'To set up a self-managed super fund'. And that is not a goal, or objective. That's a product, that might achieve an objective.

6. As to the facts in dispute, the respondent's position is sufficiently illustrated by Counsel's oral submissions:[83]

... The facts about the way in which the clients came to be referred to UGC, is not in dispute. They are comprehensively set out in the delegate's decision, at paragraphs 39-54. In his evidence - and I believe, it was very early on in cross examination, in day 1 - Mr Petrovic confirmed that he had some knowledge of the referral process, including that he knew that the people involved - the clients - were cold called, and given presentations, described as 'general product advice' by members of the referring entities - in this case, Integral, or WealthRite. > > He stated that he initially did not know that these entities were corporate authorised representatives of UGC, but he says, he came to know it, at some point, later on. He also did know, that the referrers were receiving a fee for the referral, and that the referrers were not providing comprehensive financial advice to these clients, about the products. Once the clients went through the referral process, and came across to UGC, they were allocated an advisor, such as Mr Petrovic. Mr Petrovic then followed a set formula for dealing with these clients, and he confirmed, in his evidence - certainly on day 2 - that the scripts and templates he used for each of the clients receiving this kind of service, were the same. > > And I want to go through some of the key features of each of these steps, because they are the foundation of each of the alleged breaches of financial services laws. They also inform what we say, Mr Petrovic ought to have known, about what he was doing. First, Mr Petrovic would have an initial introductory call with these clients, and I believe he described this as, just a call to introduce himself. During these calls, Mr Petrovic said to the clients: > > There are some things that we need to do, to satisfy, to meet professional obligations, as we go through this process with you. The first thing is, that you understand what you are doing. The second thing is, this action is likely to put you in a better position, and thirdly, that it's in your best interests. The way we satisfy those conditions, is by doing two types of analysis. The first one is a cost benefits analysis, so we look at where your super funds are at the moment, the costs and returns you have been receiving, in comparison to the proposed structure. Now, if there's not a material and significant benefit to you, in order to proceed, we do actually stop the process, on your behalf. > > An example of Mr Petrovic saying this to a client is at T-52, at 2 minutes and 55 seconds. Following this initial introductory call, the clients were provided with something, which we've been referring to as a, 'fact find' document. It's headed something along the lines of, 'Client personal and financial details'. It seems from the evidence, that generally this was sent to the client first. In some cases, they filled some parts of the form in, and then had a call with Mr Petrovic, to finalise it. Or, in other cases, they hadn't filled it in at all, and Mr Petrovic went through it step-by-step, and filled it in with them, over the phone. An example of one of these fact find documents is at T-7.75. > > On the first page of the fact find document, it states: > > This fact find is designed to help gather your relevant personal and financial information and goals. We use this information, along with our discussions, to help develop the financial strategy that is suitable for your needs. > > On page 2, it asks the question, 'Why are you seeking advice? What are your reasons for seeking advice, and what are you looking to achieve?' The document then seeks out information about the client's personal and financial details, in terms of their age, income, assets and liabilities, and includes some questions about retirement goals, and questions about how the client feels about the differences between their current fund, and the new proposed fund, in terms of asset allocation, risk, and how their objectives might be impacted, if the fund was to underperform. > > The next stage is - as I said - to go through with the clients, their answers to that form, in a fact find call. And in that call, in using the script, Mr Petrovic said, 'The next section is on the investment details'. And this is an example, but it's largely the same: > > I can see you guys are looking to invest in the Global Capital Property Fund. As financial advisors, our obligation is to firstly ensure you understand what you're doing. Secondly, to make sure the investment is going to be in your best interests. > > So that's an extract from a call with Client 1, T-7.59, at 8 minutes and 15 seconds. He was following a script, although, in looking at each of the calls, it becomes apparent there's some slight changes to the wording, but it is largely the same. With Client 2, he says the same thing, in terms of: > > I can see you're looking to invest in Global Capital Property Fund. As financial advisors, our obligation is to firstly ensure you understand what you're doing, and secondly, to make sure the investment is going to be in your best interests. I've just got some brief questions about your intentions, and about the investment, if that's okay. > > And that's at T-7.50 from 5 minutes, and 5 seconds. After conducting the fact find, the fact find document was then provided to the paraplanning team. And a paraplanning team member would create a benefits analysis table, which purportedly compared a projected 10-year performance of the client's current super fund, as against the proposed investments, including the predicted costs of each. The benefits analysis table would then be presented to clients over the phone, during a benefits analysis meeting, and then was subsequently included again, in the statement of advice. Examples of the benefits analysis tables can be found at pages 2238, 2239 and 4007 of the T-documents. > > In some instances, the benefits analysis tables provided to the clients were described as, 'target returns', in terms of they addressed only a potential future return, and they compared, what they said was the target return of the existing fund, as against the target return of GCPF, or a combination of GCPF and Pivotal. In other instances, it was a table headed, 'Historical returns', and it purportedly compared the historical return of the existing fund, as against the target return, although did not note, it wasn't a historical return for GCPF or Pivotal. The client would then be provided with a statement of advice. An example of the statement of advice is at T-7.77. It was given to the clients under cover of a letter which stated: > > We are pleased to provide you with our statement of advice, a customised report that details our recommendations to be made, after consideration of your financial position, your objectives, and your instructions to us that you wish to invest your superannuation in a specific product. > > The cover letter also stated that: > > We have not been engaged by you to provide advice on - firstly whether an SMSF is appropriate for you, in your circumstances, or how it compares to your current superannuation funds, whether the investment in the chosen Global Capital Property Fund that you have instructed to be placed, is a good investment, or is appropriate for you, your circumstances, or objectives, whether your plan changes, or the planned investment is in your overall best interests, or other investment or financial options. > > However, it then went on to say: > > Where it is apparent to us, and to provide advice to you that's in your best interests, having regard to the engagement, and your stated objectives, we will provide advice to you on financial matters, and whether your potential objectives are in your best interests, are likely to put you in a better position, and have associated risks, that have been appropriately considered by you. > > And despite saying, they had not been engaged to give advice on how it compares to your current super fund, as I've said, each of the SOAs contained the benefits analysis table, or tables. The benefits analysis tables consistently used a figure of 13 per cent, as the target return for GCPF, and in a number of these instances, a figure of 13.5 per cent, where there was a mix of GCPF and Pivotal. As a result of this table, it generally spat out a number that suggested to the clients that they would be, over a 10-year period, earning several hundred thousand dollars more, in the new investment structure and portfolio, than they were, in their existing fund. > > There was then, a call to present the SOA to clients, and Mr Petrovic's evidence was - and this was yesterday, on the second day of the hearing - is that he usually sent the SOA to the clients, by email. And he said, that was often, shortly before the SOA call. He said, this was because the clients would read it and get confused, so he didn't seem to want them to have a long time to read it, before he got a chance to speak to them, about it. And then he would call them and take them through it. And on the first day, he gave some evidence about his process in taking them through it. He said he would go through each page and give a summary of key points in the document. > > During that call, and following the script, Mr Petrovic stated: > > As financial advisors, our role has two components. The first one, which you'll be engaging us with, is the establishment of the self-managed super fund, rolling over from your existing super, and helping you place your intended investment. The second component is for us to provide you our professional opinion, as to whether the changes, firstly, are likely to put you in a better position; secondly, are in your best interests; and then thirdly, that you have considered all the associated risks. That second component is something we haven't been engaged to provide advice on, however we are obligated to provide, under new legislation, that took effect at the start of last year. > > An example of that, is a call with Client 2, at T-7.51 at 1 minute and 15 seconds. When talking about the SOA, not only did Mr Petrovic say that he would send it to them, shortly before the call, because they would read it and get confused. He also stated that it was his view that generally, clients didn't read the whole of these documents, thoroughly. And for that reason, we say, that what was being said to them, while the SOA was being presented to them, was particularly critical. Mr Petrovic agreed that the conduct was largely the same, in relation to each of the clients that are the subject of the decision in this matter. > > Necessarily, there are differing factors, because each of the clients presented with different personal financial circumstances, but also, they had different engagements with Mr Petrovic. He may have been using a script, but obviously they weren't. And along the way, they made different comments, and asked different questions. We've heard some of the phone calls - or snippets from some of the phone calls - in which, we say, it's apparent that the clients did not necessarily understand, either the nature of the product in which they were investing, or the level of risk that they were being exposed to. And in each instance that we heard, there was no evidence that Mr Petrovic satisfied himself that that was not the case. > > In one instance, he sought to advise the client about some further information about the product. She believed that the investment was in land, essentially, and thought that there was no risk, because she wasn't investing in any kind of property development, so there was no risk, if the property developer went bust. Mr Petrovic then sought to correct her misunderstanding and told her that no, it was in property development, which isn't actually factually accurate. And the fact that Mr Petrovic should have known that, is apparent from the presentation that has been tendered, this morning. In that presentation, there's a lengthy explanation which makes it clear that GCPF isn't going to be the owner of the real estate. > > He does then direct that client back to their referring entity, if she wants to seek some more information, but this is during a later stage, and he does not - there's no evidence that he has checked in with her, that she has done that, and now understands what she is doing. ...

7. In relation the analysis said to be undertaken by the applicant in connection with GCPF, the applicant said the prospectus indicated the 13% return was aspirational. The respondent then continued:[84]

... whilst in each of those instances, using that aspirational target figure, it is suggested that the clients would make more money in the super, it's certainly not a reasonable basis to suggest that the action is in their best interests. In the whole of the advice model was strategically designed - not around the clients in circumstances or objectives but promoting UGC products.

8. These comments were made in the context of s 961(J) of the Act which provides the provider must give priority to the client's interests when giving advice where a provider knows or ought reasonably know, that there is a conflict between the interests of the client, and the interests of the financial services licensee.
9. As to 1041H of the Act, misleading and deceptive conduct, the respondent did not suggest the applicant knew, at the time, that the statements and documents were misleading and deceptive. However, the respondent characterised the conduct as higher than careless, being a at the level of recklessness.[85]
10. The respondent accepted that the applicant's conduct is to be judged against what he did say, what he didn't say, what he did do and what he didn't do. In this regard, the respondent says of the applicant's evidence:[86]

And he did give evidence, that firstly there were a lot of red flags along the way. And secondly, that in looking at some of these documents, these templates and these scripts, he was of the view back then, that parts of it was obsolete, or shouldn't have been in there, or could have been worded differently, but didn't think it was incumbent upon him to fix them. And in saying, 'Well I thought some of this was obsolete or unnecessary', indicates that there's at least some level of discomfort with what he's being asked to do, but instead has just continued on following the instructions, regardless, and hasn't stepped up and said, 'Hey guys, I don't think we should be using this fact find template, because why are we obtaining their retirement goals' for instance, 'given we're not providing advice on retirement'. > > There's no evidence that he did so, and he certainly doesn't seem to suggest he did so, and was, you know, shot down. He just continues to execute the model.

11. When considering these matters, the respondent said the Tribunal should conclude there have been breaches in the manner asserted by ASIC.
12. As to fitness and propriety, the respondent said the circumstances of the applicant are to be assessed by his understanding of his obligations and conduct moving forward. In this regard the respondent noted that that the applicant continued to maintain a position that he did not accept the findings of contravention by ASIC, at least up until the hearing of the Tribunal proceedings.
13. The respondent also noted that incorrect statements were made in his employment contract with Fisher Financial, his employer after he left UGC, concerning regulatory action and that it would appear he continued to work in the industry after the banning order was made. These matters, the respondent said, demonstrated a lack of integrity.
14. The respondent submitted the evidence suggests the applicant is still not aware of his duties and is lacking in competence.
15. On the issue of fit and proper person, the respondent summarised its position as follows:[87]

So the factors we say, that weigh into whether or not he is a fit and proper person, and we say, indicate that he's not, is the multiple contraventions of financial services laws, which indicate either a misunderstanding, a lack of knowledge, or a complete disregard for his duties as a financial advisor. The fact that he continues to demonstrate, in some ways, that he does not understand his duties properly, and doesn't have that insight into everything that went wrong, together with other factors which are indicative of a disregard for law and compliance, and a lack of integrity, give the tribunal reason to believe that he is not a fit and proper person to provide financial services.

16. As to the banning order, scope and duration, the respondent referred to the statement of Bromwich J in Panganiban v Australian Securities and Investments Commission, where His Honour said:[88]

Banning orders under s920Aof the Corporations Act are one of the mechanisms used by ASIC to address concerns about shortcomings of such persons as financial advisors in respect of fairness, honesty and professionalism. Such a sanction, appropriately applied, has the necessary effect of deterring others from failing to adhere to those standards. That in turn facilitates ASIC's statutory obligation, in performing its functions and exercising its powers, set out in s 1(2) of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act). In particular, ASIC is required, in performing its functions and exercising its powers, to "promote the confident and informed participation of investors and consumers in the financial system": see s 1(2)(b) of the ASIC Act.

17. As to specific deterrence, while the respondent appeared to accept that it is unlikely the applicant will engage in this specific conduct again, the respondent said "unless and until there is a real understanding of what his duties are, under the Act, there can be no reasonable satisfaction that he will provide financial services in an appropriate way".[89] In this regard, the respondent continued that a person in the position of the applicant is not a "mere order taker".
18. The respondent said that the conduct of the applicant did not simply warrant an order that he undertake further training.

1. The following provisions of s 920A of the Act are relevant in determining this application:

920A ASIC's power to make a banning order > > Making a banning order > > (1) ASIC may, in writing, make one or more orders (banning orders) against a person if: > > ... > > (d) ASIC has reason to believe that the person is not a fit and proper person to: > > (i) provide one or more financial services; or > > (ii) perform one or more functions as an officer of an entity that carries on a financial services business; or > > (iii) control an entity that carries on a financial services business; or > > ... > > (da) ASIC has reason to believe that the person is not adequately trained, or is not competent, to: > > (i) provide one or more financial services; or > > (ii) perform one or more functions as an officer of an entity that carries on a financial services business; or > > (iii) control an entity that carries on a financial services business; or > > (f) ASIC has reason to believe that the person is likely to contravene a financial services law;

2. Section 920B specifies the scope of the banning order that may be made, including what activities are prohibited and the possible duration of any banning order.
3. There is no dispute in these proceedings that the power to make banning order under s920A of the Act is enlivened. Rather, there is a dispute concerning the extent to which the applicant contravened the Act, specifically in relation to ss 952E, 961B, 961G, 961J and 1041H, and what order is now appropriate.
4. Further, the applicant does not contend a sanction should not be imposed. Rather, the applicant says any banning order should be less than 3 years and limited in scope.

1. It is convenient to first deal with the specific breaches of the Act about which submissions have been made.

1. Section 961B of the Act sets out the obligation of the applicant in respect of acting in the best interests of his clients. It provides:

961B Provider must act in the best interests of the client > > (1) The provider must act in the best interests of the client in relation to the advice. > > (2) The provider satisfies the duty in subsection (1), if the provider proves that the provider has done each of the following: > > (a) identified the objectives, financial situation and needs of the client that were disclosed to the provider by the client through instructions; > > (b) identified: > > (i) the subject matter of the advice that has been sought by the client (whether explicitly or implicitly); and > > (ii) the objectives, financial situation and needs of the client that would reasonably be considered as relevant to advice sought on that subject matter (the client's relevant circumstances); > > (c) where it was reasonably apparent that information relating to the client's relevant circumstances was incomplete or inaccurate, made reasonable inquiries to obtain complete and accurate information; > > (d) assessed whether the provider has the expertise required to provide the client advice on the subject matter sought and, if not, declined to provide the advice; > > (e) if, in considering the subject matter of the advice sought, it would be reasonable to consider recommending a financial product: > > (i) conducted a reasonable investigation into the financial products that might achieve those of the objectives and meet those of the needs of the client that would reasonably be considered as relevant to advice on that subject matter; and > > (ii) assessed the information gathered in the investigation; > > (f) based all judgements in advising the client on the client's relevant circumstances; > > (g) taken any other step that, at the time the advice is provided, would reasonably be regarded as being in the best interests of the client, given the client's relevant circumstances. > > Note: The matters that must be proved under subsection (2) relate to the subject matter of the advice sought by the client and the circumstances of the client relevant to that subject matter (the client's relevant circumstances). That subject matter and the client's relevant circumstances may be broad or narrow, and so the subsection anticipates that a client may seek scaled advice and that the inquiries made by the provider will be tailored to the advice sought.

2. As is evident, subs 961B(2) identifies the matters required to be done by a provider to meet the best interests obligation.
3. The applicant admits contraventions in the terms set out above. However, the applicant says that any breach "was a direct result of his reliance on UGC's instructions which were reasonable for him to follow with the time".
4. Insofar as the applicant suggest his non-compliance is in some way excused by his reliance on instructions, I do not accept this submission. My reasons are as follows:

(a) as the Act makes clear, the obligations are personal to the provider, in this case Mr Petrovic; > > (b) the evidence of the applicant was to the effect that he had concerns about the UGC business model at the time he was trained in relation to the model. However, he took no action either to obtain a copy of the legal advice or to raise his concerns with his superiors prior to advising clients; > > (c) the evidence concerning his education and previous work experience, suggests his training and experience at the time he commenced implementing the UGC business model for clients was not, as he described, that of a junior; > > (d) in any event, Mr Petrovic moved into a more senior role at UGC supervising others - the evidence identifying Stephen Rogers as one such person; > > (e) the process of advising clients included interviews (fact find calls) which Mr Petrovic conducted with clients to identify their goals and compilation of other information relevant to the implementation of the clients' investment decisions. Through this process, the Clients were informed that checks were being performed by the applicant to ensure any action to change investments was in the Client's best interests;[90] > > (f) The information provided through these meetings and documents which the applicant required each of the clients to complete was used for the purpose of preparing the SOAs.; > > (g) the applicant reviewed the SOAs prepared for the identified clients by paraplanners and he was responsible for reviewing the documents, authorised the documents for publication and presented these documents to the clients. That advice, in part considered (or should have considered) whether returns from the proposed investment (GCPF or the Platinum Alpha Fund) would likely result in increased returns and was appropriate for each of the Clients having regard to their goals and circumstances.

5. At all times leading up to the implementation of the Clients' instructions, the creation of their SMSFs and the investment in the selected funds, the applicant was in direct communication with each of the Clients. The Clients were relying on what they were told by the applicant and the advice he provided. There was no suggestion that he sought any input from his superiors in relation to any concerns he had, either generally or in respect of particular clients concerning the implementation of the UGC business model or the adequacy of information provided by him to his clients concerning their best interests. As such, it was incumbent on him to ensure his actions and his advice were in the best interests of the Clients and the failures that occurred should be attributed to him.
6. The use of template documents and any training given to the applicant provides no excuse. Rather, the applicant was required to seek relevant information from the Clients, to listen to what he was told by the Clients and ensure that the advice he gave and the actions he took were responsive and appropriate.

961G Resulting advice must be appropriate to the client > > The provider must only provide the advice to the client if it would be reasonable to conclude that the advice is appropriate to the client, had the provider satisfied the duty under section 961B to act in the best interests of the client.

2. Of the accepted breaches of this section, the applicant says that in following the UGC business model "he had not satisfied the duty under s 961B which included that he had not identified the client's objectives, financial situation and needs that would reasonably be considered as relevant to the advice sought". He said that, due to UGC business model, "the Relevant Client's appetite and tolerance for risk was not assessed".
3. As to the Reasons at [96(a)-(e)], the applicant said these matters "do not necessarily support a finding that s 961G was breached", because the matters identified in that paragraph "proceed on the assumption that the client did not have a high risk tolerance when his risk tolerance had not been assessed".
4. Again, Mr Petrovic says that of Client 1, his breach was a direct result of "his reliance on UGC's instructions which were reasonable for him to follow at the time".
5. The problem with this submission is that it diverts attention from the information being provided by the Clients and what was necessary to be done by the applicant to satisfy his obligations.
6. In his file note relating to Client 1 dated 24 June 2021, the applicant notes advice was sought as follows:[91]

Implementation of the choose (sic) investment fund with Global Capital Property Fund. and whether or not establishing the SMSF or the investment they wish to invest into is in their best interest.

[Client 1 and his wife] understood that by looking for higher returns there is a natural progression to greater exposure to risk. Explained that 'growth' assets historically have achieved greater returns than defensive/balanced asset classes however are subject to greater price fluctuations but being able to be invested for a long period of time (at least 5-7 years) portfolios are effectively able to ride out short term market volatility. There is also the ability for portfolios to recover from sharp losses as there is time in the market remaining. The need to reduce investment exposure to less growth assets over time would increase as [Client 1 and his wife] nears retirement and investment goals change to the preservation of capital and need for income drawdown from funds. > > 1. Identified the subject matter of advice sought by the client(s):

• Superannuation: [Client 1 and his wife] has limited the advice by us. Specifically requesting the need to set up a SMSF and invest in Global Capital Property Fund. Solely looking at increasing investment returns. [Client 1 and his wife] felt comfortable investing in line with this to achieve the main aim of more super at retirement.

1. The SOA for Client 1 date 5 July 2001 was subsequently prepared.[92]
2. The SOA purported to analyse the existing superannuation investment returns with that expected from GCPF. This analysis used a target rate return of 13%.
3. Having regard to the significant increase in fees to that then being paid by Client 1, the likelihood of higher returns being achieved and the risks associated therewith are critical when considering whether the ultimate advice, which in effect was to change the existing investment profile, was appropriate.
4. This analysis was not undertaken by the applicant or those assisting in preparing the SOA for Client 1. Rather, as recorded in the Reasons[93], the applicant asserted the 13% target rate used in the SOA was appropriate because:

(a) 'it was the target rate represented in the Prospectus'; > > (b) 'GCPF assess each investment based on its ability to derive an IRR back to GCPF of no less than 17% per annum at the time of initial investment and enters into many investments with expected IRR's above 20% per annum, thus supporting the 13% target return and possibly even higher returns'; > > (c) 'the prospectus disclosed that GCPF would not make investments that do not comply with its investment criteria and pass the due diligence process; and > > (d) 'as at January 2023, the first development completed generated a return of 22 percent'.

5. In short, the applicant said others had made an assessment which the applicant followed. As noted in the extract from the transcript, set out above, this position was maintained by the applicant at the hearing before the Tribunal.
6. In reality, the analysis in respect of GCPF, on which the SOAs were based, was little more than a mathematical calculation with an assumption about future performance based on an "aspirational" return of 13%.
7. Finally, at the time the SOA was provided to Client 1, it is important to remember that no projects had been completed. The first development, completed in January 2023, generated a return of 22%. The size of the investment was not available at the time the SOA was provided. As the person providing advice to Client 1, the applicant was responsible for carrying out appropriate analysis to ensure that the advice provided was appropriate and properly informed the Clients of the risks.

961J Conflict between client's interests and those of provider, licensee, authorised representative or associates > > (1) If the provider knows, or reasonably ought to know, that there is a conflict between the interests of the client and the interests of: > > (a) the provider; or > > (b) an associate of the provider; or > > (c) a financial services licensee of whom the provider is a representative; or > > (d) an associate of a financial services licensee of whom the provider is a representative; or > > (e) an authorised representative who has authorised the provider, under subsection 916B(3), to provide a specified financial service or financial services on behalf of a financial services licensee; or > > (f) an associate of an authorised representative who has authorised the provider, under subsection 916B(3), to provide a specified financial service or financial services on behalf of a financial services licensee; > > the provider must give priority to the client's interests when giving the advice.

2. The applicant says "[the] only sense in which [he] breached s 961J is that he worked for UGC during a period of time that it had a limited advice team and therefore helped clients place the chosen investments without enough information to know whether this was right for them". In saying so, the applicant accepts "investments were UGC related in that UGC received a known benefit whilst there was not enough information about the client to determine whether the investment was in the clients' best interests".[94]
3. However, the applicant does not accept the propositions in the Reasons at [100(a)-(e)] (set out above) are sufficient to establish a breach of s 961J(1). Again, the applicant says "the fact that a Client has taken on more risk and higher fees doesn't necessarily mean the Client won't benefit from the higher targeted returns" and, in any event, his actions were a direct result of his reliance on UGC's instructions "which were reasonable for him to follow at the time".
4. As the respondent submits in its SFICS[95] , there can be no doubt that a conflict of interest arose in respect of each Client. It arose both from the fact fees would be received and that GCPF or Platinum Alpha Fund were related entities. These matters were either known or ought reasonably to have been known by the applicant. Consequently, the applicant was required to give priority to the Clients' interests when giving advice.
5. The respondent said that such priority was not given as there was no "genuine consideration of alternative products or strategies" considered by the applicant. The applicant made no attempt to compare the proposed products with the Client's existing arrangements or with other available options in the market. Rather, the respondent submitted, "the advice given invariably steered clients towards UGC's proprietary offerings, which financially benefited UGC".[96]
6. In response, the applicant submitted that he did not seek to prioritise the interests of UGC over those of the Clients and that "he believed, based on the benefit analysis tool, that there chosen funds would provide a benefit of at least $100,000 greater returns over 10 years than their superannuation funds".[97]
7. The problem with the applicant's submission is that s 961J provides the applicant "must give priority to the client's interests when giving advice".
8. In the present case, the giving of priority to each Client's interests required more than the provision of SOAs using template documents to provide advice in a pro forma manner without proper analysis. It required a consideration of the information being provided by each of the Clients and undertaking such investigation and analysis as was necessary having regard to the action proposed in order to determine what was in the best interests of each Client.
9. This obligation was upon the applicant, as it was he who was responsible to review and signoff on the SOAs. Even in the context of the UGC business model, the fact-finding process was about the applicant communicating with the Clients and identifying goals and implementing investment strategies likely to increase returns. This required an analysis of the proposed new investments in the context of each Client's circumstances, not just an acceptance of target returns without a proper risk assessment or appropriate advice.
10. The need to do so is illustrated by the answers given by Client 6 as part of the fact-finding process. As set out above, Client 6 made clear she did not understand the definition of "investment risk" and that she relied on her financial adviser. That was Mr Petrovic.

Misleading or deceptive conduct (civil liability only) > > (1) A person must not, in this jurisdiction, engage in conduct, in relation to a financial product or a financial service, that is misleading or deceptive or is likely to mislead or deceive.

2. It is not relevant that the person who engages in the conduct intended to mislead or deceive: see eg, Hornsby Building Information Centre Pty Ltd and Anr v Sydney Building Information Centre Ltd[98], per Murphy J at 234.
3. As stated in the Position Statement, the applicant accepts that s 1041H was breached because "the statements in the scripted phone calls and the SOAs were objectively confusing". The Position Statement then continues that the applicant had no intention to confuse his clients and that he believed the Client "understood the scope of the engagement they had paid him to provide".
4. In oral submissions, Counsel for the applicant said:[99]

In terms of 1041H(1) (sic), he accepted, yesterday, that he can see when the statements were put to him, how someone might be confused by, why certain things were in the statements of advice, or why certain things were said in the call scripts - he can see now, how someone might have been confused. > > Again, he said he didn't ever set out to confuse people. He tried to explain things to people, he said. In fact, he said, he sent them a statement of advice and then he'd called them, before they got in confusion, and talked them through it, because he'd had circumstances where he knew that clients would read things and get confused. He was trying to stop confusion. But to a certain extent, perhaps he himself was confused, and it seems like even the people who designed these statements were confused, as to how to provide compliant, limited advice at a time when there was industry-wide confusion.

5. Again, the problem with this submission is it diverts attention from what was said and done by the applicant in the fact find process and in preparing the SOAs. In respect of these communications, it was incumbent on the applicant to consider the content of the statements he made and the documents he provided to the Clients.
6. While the applicant may have been following scripts and using template documents, as the respondent submitted, the clients were "repeatedly told they are going to be provided advice in their best interests, and that the advisor is going to consider whether or not what they're doing is in their best interests, even if they haven't been engaged to do so".[100] The applicant was the person who provided the advice.
7. It is in this context that the responsibility of the applicant is to be assessed.

1. The respondent determined there had been of failure of the applicant that comply with s 952E(2) of the Act. Relevantly, s 952E provides:

Giving a defective disclosure document or statement (whether or not known to be defective) > > ... > > (2) An authorised representative of a financial services licensee contravenes this subsection if: > > (a) the representative gives (see subsection (5)) a person a disclosure document or statement that is one of the following, in circumstances in which the document or statement is required by a provision of this Part to be given to the person: > > (i) Statement of Advice; > > (ii) a Cash Settlement Fact Sheet; > > (iii) information, a statement or a copy of a record required by subsection 941C(5) or (7), 941D(2), 946AA(5), 946B(3), (6) or (8) or 946C(2); and > > (b) the disclosure document or statement is defective. > > Exceptions > > ... > > (4) A person does not contravene subsection (2) if the disclosure document or statement: > > (a) was provided to the person by a financial services licensee for whom they were, at that time, an authorised representative; or > > (b) was defective because of information, or an omission from information, provided to them by a financial services licensee for whom they were, at that time, an authorised representative.

2. The applicant submitted he did not contravene this section by reason of the exception in s 952E(4). This was because he says the relevant information in any prospectus for particular products and/or the instructions and templates provided as part of the UGC business model was the cause of the defective disclosure document. In opening, the applicant's case, Counsel for the applicant put the proposition as follows:[101]

The template statements of advice were provided to Mr Petrovic by UGC. Now, while Mr Petrovic ultimately signed off on these statements of advice, the defects in them were the result of information, or an omission from information, provided to him, by UGC. That the financial services licensee of whom he was, at the time, an authorised representative. That information, with the provision of the template statement of advice, and the information conveyed to Mr Petrovic, both expressly and by implication, that the statement of advice, including the way the advice had been clearly scoped, wasn't compliant with all relevant financial services laws, on the basis of UGC's legal and compliance advice, provided through its compliance team, and to its senior management.

3. I do not accept this submission. While it is correct that training, templates and other documents in connection with the UGC business model were provided to Mr Petrovic, the fact remains that the SOAs were signed off by him in circumstances where he was ultimately responsible for reviewing and accepting their content. It was the applicant that conducted the fact finding interviews, explained the advice and answered relevant question. All this occurred in circumstances where he made statements to each of the Clients that he would be acting in their best interests.
4. His role required him to undertake appropriate analysis. In the case of the "target return" of 13% found in the GCPF prospectus, this requirement was not satisfied by merely accepting the target figure (which was described as "aspirational") without considering, inter alia. that the target figure was not based on any projects in which the fund was involved that had been undertaken and delivered, nor did there appear to be information in the prospectus otherwise justifying the targeted return. Further, no risk analysis appears to have been done concerning the potential range in returns for projects based on the usual vicissitudes inherent in such projects nor were other options considered.
5. Consequently, contraventions by the applicant of s 952E(2) are established.

1. In its Reasons, the respondent made findings about each of ss 920A (d), (da), (e) and (f) of the Act, being the relevant circumstances said to enliven the power to make a banning order.
2. I will deal with each of these in turn.

(a) fitness and propriety is to be determined at the date the Tribunal makes its decision on review; and > > (b) s 913BB of the Act requires ASIC (or the Tribunal on review) to have regard to the matters set out therein in determining the fit and proper person test. This includes whether a banning order has previously been made against the person in question, whether the person has been convicted of an offence and any other matter considered relevant.

2. In Karamian and Australian Securities and Investments Commission[102] (Karamian), the President of the Administrative Appeals Tribunal (AAT), His Honour Justice Kyrou (now President of this Tribunal) said of s 920A(1)(d) (footnotes omitted):

155. The phrase 'fit and proper person' has a flexible meaning which is informed by the context in which it is used, the activities in which the person is or will be engaged and the ends to be served by those activities. With respect to an office, 'fit' involves honesty, knowledge and ability. In other contexts, it may be unwise to attempt any definition of the matters which may be inquired into, with each case depending upon its own circumstances. > > 156. The question whether someone is a fit and proper person involves a value judgment which may be informed by: an evaluation of the seriousness of the person's conduct; the likelihood that improper conduct will recur; and the weight, if any, to be given to matters favouring the person.

3. The applicant appears to accept that compliance with the Financial Planners and Advisers Code of Ethics 2019 (Code of Ethics) is another matter to which regard can be had in determining whether a person is fit and proper. Reference is made to s 913BB(2)(k) of the Act.
4. However, the applicant says:[103]

48. Given the matters listed in the test are of a more serious nature, even if ASIC considers that compliance with the Code of Ethics is relevant to this determination, it should be given minimal weight in comparison to the matters listed at 913BB(2). The applicant submits that compliance with the Code of Ethics is a disciplinary matter rather than a matter that the Tribunal rely upon when assessing whether the applicant is a fit and proper person to perform financial services for the purposes of making an order banning him from providing this financial services.

5. In his SFICS, the applicant says:[104]

(a) he did not act dishonestly or seek to enrich himself and the Clients' expense; > > (b) his breaches were unintentional; > > (c) he received no direct benefit from his misconduct; > > (d) when made aware by ASIC of potential problems concerning the UGC business model, the applicant fully cooperated with ASIC and ceased giving execution only advisers; > > (e) while this conduct could be viewed as "careless in relying on UGC's advice and instructions, it did not indicate incompetence or irresponsibility"; > > (f) the applicant is of good character, except responsibility for his actions and is learn from his experience; > > (g) the applicant "has an otherwise unblemished record and good reputation".

6. The applicant also refers to his work after use of the UGC business model ceased.
7. In relation to the Code of Ethics, the respondent submitted the applicant breach several key requirements of the Code, including:[105]

Standard 1: Mr Petrovic participated in an advice model that purported to deliver general or execution-only advice, but in reality involved the provision of personal advice. This circumvented the legal obligations attached to personal advice, contrary to the requirement to act in accordance with applicable laws and not to circumvent their intent. > > Standard 2: Mr Petrovic failed to act with integrity and in the best interests of each client. In all six client cases, his advice was found to prioritise the interests of UGC over those of the clients, particularly by recommending high-fee, high-risk investments linked to UGC without adequate consideration of alternatives. > > Standard 3: Mr Petrovic acted where a conflict of interest existed, advising clients to invest in UGC-related products from which UGC derived fees, without giving priority to the clients' interests or adequately managing the conflict. > > Standard 5: Mr Petrovic did not ensure the advice provided was appropriate to each client's individual circumstances. Nor did he demonstrate that he was satisfied the clients understood the advice or its risks, costs, and benefits. > > Standard 9: Mr Petrovic's conduct was misleading or deceptive in relation to both verbal representations and the contents of disclosure documents such as SOAs, breaching the standard requiring good faith and competence.

8. In reply, the applicant challenged the respondent's characterisation of his conduct. The applicant submitted:[106]

49 ... Put at a high level: > > a. Standard 1: he did not seek to circumvent the intent of the laws or to provide personal advice, he sought to provide execution only advice; > > b. Standard 2: he did not seek to prioritise the interests of UGC over those of the clients, for each of the clients, he believed, based on the benefit analysis tool, that their chosen funds would provide a benefit of at least $100,000 greater returns over 10 years than their existing superannuation funds; > > c. Standard 3: this standard states "you must not advise . . .where you have a conflict" (emphasis added). The applicant did not personally have a conflict of interest or duty, he did receive any specific benefit or commission for executing investments into any particular products; > > d. Standard 5: he was satisfied that the clients understood the advice and its risks, costs and benefits, as explained both verbally and in the scope, warnings and disclaimers within the SOAs themselves; > > e. Standard 9: his conduct was not misleading or deceptive as explained at [32]-[35] above.

9. Of Standard 9 and the template SOA, the applicant had earlier submitted:[107]

35. Overall, the template SOA reads like a document where the author has tried to comply with the regulations in a situation where the advice was ultimately too limited in scope to make compliance possible. The result is admittedly confusing but, in the applicant's submission, not capable of leading a reasonable consumer into the error of believing that the applicant was advising them on the merits of establishing an SMSF or their chosen investments.

10. The Position Statement adopts a slightly different position. However, the applicant restates in that document that the SOAs "were objectively confusing" and then says "he can see why someone might have been misled by some of the wording".
11. In my view, the applicant is not a fit and proper person. My reasons are as follows:

(a) He has contravened the Act as I have found above; > > (b) He was the person who dealt with the Clients, signed off on the SOAs and was ultimately responsible for implementing the investment strategies without properly addressing each Client's best interests. > > (c) His actions occurred in circumstances where he had concerns about the appropriateness of the UGC business model and took no action to raise these concerns with his superiors. Further, he did not raise these matters with the Clients. > > (d) His role in supervising at least one other UGC staff member indicates he was not simply performing the role of a junior. Rather, his role extended to overseeing the work of others and ensuring appropriate guidance and supervision was provided in connection with complying with the law. > > (e) His conduct constituted a failure to comply with Standards 1, 2, 3, 5 and 9 of the Code of Ethics.

12. While he has now admitted errors were made, he maintains a position that seeks to divert attention towards UGC and his superiors. In this regard, as set out above, his statement made to the Tribunal at the commencement of day 2 of the hearing was to the effect that he was misled by UGC and his superiors and any misleading of the Clients by him was inadvertent. However, his evidence was that he had some concerns at the time he was implementing the UGC business model but took no action for the reasons stated in his oral evidence.
13. His evidence before the Tribunal indicates to me that the applicant still does not accept the obligations that are imposed on him under the Act are personal to him and are obligations he must comply with irrespective of the position adopted by his superiors. Nor does he fully accept that it was he who conducted the fact finding interviews and signed off on the SOAs. In this regard, I found the applicant sought to obfuscate in respect of some of the answers concerning him providing advice.
14. Also of concern is the employment contract with Fisher Investments, entered into subsequent to his employment with UGC. The statements made in his employment contract, identified in the respondent's SFICS at [121] and following, demonstrate a lack of candour and/or a lack of understanding at that time that he engaged in inappropriate conduct.
15. Finally, these matters suggest a deficiency in the applicant's training and competence, a matter to which I will return below.
16. In reaching the above conclusions, I should make clear that I make no finding that the applicant acted dishonestly.

Section 920A(1)(da)- adequately trained and competent

1. The respondent refers to the observations of the President in Karamian at [206]-[209]. The respondent continues:[108]

126. As noted in Karamian there is overlap between s 920A(1)(d) and 920A(1)(da) because the concept of competence to perform the role necessarily informs the persons fitness and propriety. Given the significance of Mr Petrovic's failings, and the multiple breaches of financial services laws, and his continued attitude towards his failings, there is reason to believe Mr Petrovic is not adequately competent. Whilst it is recognised that he has significant experience, educational achievement and training, that training evidently was insufficient to prevent him from contravening the Act. > > 127. In Mr Petrovic's SFIC he states: "Whilst his conduct could be viewed as careless in relying on UGC's advice and instructions, it did not indicate incompetence or irresponsibility..." This should be rejected. A competent advisor, applying their own independent skill and judgment ought to have recognised the fundamental deficiencies in the advice model that was being implemented.

2. The applicant rejects this contention that the applicant's "present attitude towards his failing demonstrates any incompetence" and says he "has simply provided a nuanced account for why he acted in the way he did and explaining that despite his previous error of judgement, he acted in good faith".[109]
3. In Karamian, the President said (citations omitted):[110]

208 ... 'Competence' relates to the skills, attitude, aptitude and acumen a person possesses. ... > > 209 In Schroeder v ASIC, the Tribunal found that there was a reason to believe that Mr Schroeder was not adequately trained or competent to be involved in managing the provision of financial services because of his unsatisfactory approach to carrying out his roles as an officer and responsible manager. In Anderson v ASIC, the Tribunal found that s 920A(1)(da) was satisfied on the basis that Ms Anderson had advised her clients to invest in a high risk managed investment scheme and had equated that investment to a low risk 'term deposit', in circumstances where such advice was not in the best interests of her clients.

4. As referred to above, the applicant's evidence before the Tribunal and the Position Statement sought to excuse or explain his conduct on the basis that he was a junior employee and was implementing the UGC business model on the basis of instructions and training he had received.
5. However, in my opinion, his evidence demonstrates a continuing unsatisfactory approach to his role in authorising and providing the advice given and his responsibility for breaches of the financial services laws and not acting in the best interests of his clients. It demonstrates a lack of appreciation of the personal responsibilities he has as a financial advisor and, consequently, a lack of competence.
6. This is highlighted by the fact he had concerns at the time he commenced implementing the UGC business model, did nothing to raise these concerns with his superiors and continues to rely on the assertion he was acting appropriately, in the sense that his conduct should be excused. Further, as he has partly acknowledged, the template documents he used and the information provided both from and to the Clients should have led the applicant, if a competent person, to identify and address the best interests of the Clients and comply with his statutory obligations.

Section 920A(1)(e) -Not complied with financial services laws

1. The applicant has admitted contraventions in the Position Statement.
2. I have set out above my conclusions in relation the nature and extent of the contraventions.

Section 920A(1)(f)- likely to contravene financial services law

1. In Poidevin and Australian Securities and Investments Commission[111] the President Justice Thomas and Deputy President Redfern PSM said:

There are no prescribed matters in the Act which go to the question of whether a person is 'likely to contravene.' The material relied on, to make a finding that a person has reason to believe that the person will do something, must be convincing. For example "[a] pattern of past breaches might provide an affirmative answer to that question, whereas in other cases, the gravity of a single episode might be sufficient for that purpose".

2. In Rothnie and Australian Securities and Investments Commission (Taxation)[112], the Deputy President Malloy said:

Section 920A(1)(f) calls for a positive finding that Mr Rothnie is likely to contravene a financial services law in the future. The matter must be considered as at the time of this decision. There is strength in ASIC's arguments. Taking all the circumstances into account, however, including Mr Rothnie's professed reforms, the fact he has been subjected to a banning order for almost two years, and his experience of these proceedings, I am not satisfied there is reason to believe Mr Rothnie is likely to contravene a financial services law in the future.

165. ... , there is reason to believe Mr Petrovic is likely to contravene a financial services law because his conduct reveals a persistent pattern of non-compliance, a failure to acknowledge wrongdoing, and a lack of insight into the seriousness of his obligations. Whilst he relies on the fact that he is no longer engaged in the problematic advice model to suggest there is not reason to believe he would contravene financial services laws in the future, the issue remains that he demonstrated a significant misunderstanding of his duties. Unless the Tribunal is satisfied that Mr Petrovic truly understands his duties, there is reason to believe he would repeat his errors, albeit it in a different context.

4. In reply, the applicant submits:[114]

As noted in his initial SFIC and repeated above at [19] and [53], the applicant has acknowledged his failures and shown insight which demonstrates that he now understands his duties and is unlikely to contravene a financial services law in the future.

5. In my view, the findings I have made, concerning whether the applicant is now fit and proper person and/or whether he is competent, provide a basis for inferring the applicant may breach financial services laws in the future. There was a need for the applicant to meet his personal obligations, not simply comply with directions of those that might employ him. His failure to do so is exacerbated because he had concerns as to the appropriateness of the UGC business model but took no action. His position before the Tribunal, namely that he was justified in following instructions or excused from doing so, suggests a continuing lack of insight.
6. There are some indicators to the contrary. These are the changed position from that adopted in submissions originally made to ASIC to his position before the Tribunal including what is said in the Position Statement concerning the nature and extent of his breaches.
7. On balance, I have reason to believe non-compliance might occur in the future.

1. There does not appear to be a dispute concerning the principles applicable in respect of whether a banning order should be made or its duration.
2. Such an order serves to protect the public as well as providing specific and general deterrence. As identified by McHugh J in Rich v Australian Securities and Investments Commission[115] [2004] HCA 42; (2004) 220 CLR 129 (referring to the decision of Santo J in HIH Insurance Ltd (in prov liq); Australian Securities and Investments Commission v Adler[116]), relevant considerations include:

1. Disqualification orders are designed to protect the public from the harmful use of the corporate structure or from use that is contrary to proper commercial standards. > > 2. The banning order is designed to protect the public by seeking to safeguard the public interest in the transparency and accountability of companies and in the suitability of directors to hold office. > > 3. Protection of the public also envisages protection of individuals who deal with companies, including consumers, creditors, shareholders and investors. > > 4. The banning order is protective against present and future misuse of the corporate structure. > > 5. The order has a motive of personal deterrence, though it is not punitive. > > 6. General deterrence is an object of the legislation.

3. Punishment is not the object of a banning order.
4. As to RG 98, the respondent says in its SFICS, it provides examples of contravening conduct, relevant factors and the period for which any banning order should be made.[117]
5. In Tarrant v Australian Securities and Investments Commission[118] the Tribunal said:

20. Simply deciding the matter in accordance with ASIC policy without regard to whether a more appropriate outcome might have been reached would be an error of law. In Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577 Bowen CJ and Deane J stated at 590: > > ...the Tribunal is not, in the absence of specific statutory provision, entitled to abdicate its function of determining whether the decision made was, on the material before the Tribunal, the correct or preferable one in favour of a function of merely determining whether the decision made conformed with whatever the relevant general government policy might be. > > It is in that context that Brennan J's oft cited observations as President of the AAT in Re Drake and Minister for Immigration and Ethnic Affairs (Drake No 2) [1979] AATA 179; (1979) 2 ALD 634 that the Administrative Appeals Tribunal is entitled to have regard to government policy unless the policy is unlawful or there are cogent reasons to the contrary must be understood. Those remarks are often cited as if they preclude challenge to the soundness of policy. That ignores the holding of the Full Court and Brennan J's own rejection of that proposition. In Re Drake No 2 > > (a) Brennan J noted the policy he was applying had been made in the exercise of explicit statutory power and was subject to parliamentary scrutiny (at 643-4); > > (b) Brennan J referred to the distinction he had first adverted to in Re Becker and Minister for Immigration and Ethnic Affairs [1977] AATA 12; (1977) 15 ALR 696 between such high level ministerial policy and that made at a departmental level (at 644); and > > (c) Brennan J recognised that the Tribunal could not deprive itself of its freedom to give no weight to a Minister's policy in a particular case. > > Moreover, if the application of otherwise sound ministerial policy would work injustice in a particular case, Brennan J observed (at 645) that that of itself would provide a cogent and sufficient reason to depart from the policy as "consistency is not preferable to justice". > > 21. However, insofar as they set out the policy formulated by ASIC, the Tribunal accepts it should apply the policy expressed in Regulatory Guides 98 and 175, notwithstanding it is agency rather than high level ministerial policy. Neither at the time when the applicant was legally represented, nor later when he was not, was it suggested that the Regulatory Guides were unlawful or that there were cogent and sufficient reasons to depart from the policy expressed by them. The Tribunal has not of its own motion identified any deficiencies to suggest such a conclusion should be reached. The Regulatory Guides appear to be carefully calibrated documents produced by an agency which has responsibility for prudential regulation of the provision of financial advice. The policy appears sound. That observation is not intended to preclude the possibility of later challenges - it is made merely to indicate that where a policy on its face is uncontentious the Tribunal is lawfully entitled to have regard to such policy and to apply it subject to the right of an applicant to put the matter in issue and subject to the policy not working unfairness in the particular case.

6. Of these statements, the President in Karamian said:

285. It follows from the above analysis that, to the extent that Kerr P and Redfern SM expressed a different view in the Tarrant AAT Decision, I respectfully disagree. In my opinion, RG 98 is not the kind of policy that falls within the first type described at [‎282(a)] above, in respect of which Brennan J said in Drake (No 2) that the Tribunal should apply it unless there are cogent reasons to the contrary. > > 286. In the present case, I have had regard to RG 98 as part of the material before me but have not 'applied' it in any sense. I have been able to reach the conclusions set out earlier in my reasons simply by applying the legal principles I have summarised to the findings I have made based upon the evidence and the parties' submissions.

7. The respondent accepted that RG 98 "may provide useful guidance to the Tribunal, as emphasised by Kyrou J", but "RG 98 is not binding on the Tribunal and does not prescribe a standard that the Tribunal must apply". What is required "is for the Tribunal to determine the correct and preferable decision based on the evidence and applicable legislation".[119] The applicant does not submit otherwise.
8. I will proceed on the basis of what the President said in Karamian, noting that it is essential in any decision that proper regard be had to the facts and circumstances of the particular case.
9. As to what order should be made, the respondent referred to RG 98 and various decisions of the AAT.
10. In relation to the applicant's contention, that a 6 year banning order was excessive and punitive and should be reduced to less than 3 years, the respondent makes the following submissions:[120]

(a) contrary to the submissions of the applicant, there is a need for specific deterrence. In this regard the actions of the applicant may not have been deliberate but "they were at best careless and in significant disregard to the interests of his clients and their financial well-being". Further the applicant "still appears to lack the appropriate insight into his conduct and has failed to demonstrate appropriate remorse - his focus is on the impact on him, rather than the impact on his clients". > > (b) as to general deterrence, the respondent says: > > > (i) the applicant was a team leader for a period of time who supervised and trained junior staff. He was more senior than he betrayed. As such he "ought to not only have had the experience to know better but also the confidence to stand up to his employer and refuse to follow direction where they were inappropriate"; and > > > > (ii) general deterrence remains relevant as it is for "individual advisers who carry the responsibility to comply with their obligations under the Act".

11. Consequently, the respondent submits, a ban of 6 years is appropriate. Further, there is no justification to limit the ban to the provision of financial advice to retail clients. Here, the respondent says there were multiple breaches of the financial services law which were "in egregious circumstances".
12. In his SFICS, the applicant referred to various decisions of the AAT which were said to be "analogous" including the decision in Atkins and Australian Securities and Investments Commission[121] (Atkins) in which the Tribunal affirmed a decision by the respondent to impose a banning order of 3 years.
13. Of a comparison of the factors in Atkins to those of the applicant, the applicant said (citations omitted):[122]

68. The crucial difference between the Applicant's case and that in Atkins which makes a shorter banning order appropriate is that the Applicant's breaches were a result of his reliance on UGC's instructions and the scope of his role at UGC. However, there are several mitigating factors that the Tribunal found relevant in Atkins which are also applicable here: > > 68.1. The Applicant did not gain additional benefits as a result of failing to act in the best interest of his clients above any he would have gained if the clients had proceeded with compliant advice from him. This weighs in favour of imposing a banning order for less than three years. > > 68.2. The Applicant has a good compliance history and there is no evidence of any prior complaints regarding the Applicant during the years he has worked in the financial services industry. The Relevant Clients have not complained about the Applicant's advice. > > 68.3. The Applicant's conduct is not continuing and he understands the deficiencies in the advice that he gave to the Clients. The Applicant ceased providing execution only advice in October 2022 after UGC changed its business model in response to ASIC's concerns. This was over a year before ASIC sent the Applicant his s 920A Notice. > > 68.4. The Applicant has suffered hardship as a result of the banning order. He has suffered a reduction in his income and has experienced stress and anxiety. > > 68.5. The Applicant's conduct was the result of inadvertence, not dishonesty, he fully cooperated with ASIC in its investigation, and accepted that he had failed to act in the Clients' best interests. This weighs in favour of a banning order for less than three years. > > 69. Unlike the case in Atkins, the Applicant did perform a Benefit Analysis to confirm that the new SMSF would outperform the Relevant Clients' existing superannuation > > funds. > > 70. In Atkins, there was evidence that the clients had suffered serious loss. In ASIC's statement of reasons they accepted the Applicant's submission that ASIC is not alleging client loss. The decision only notes that the breaches had the potential to adversely affect clients.

14. As to the cases to which the respondent referred as providing guidance, the applicant said "those cases were owners of the companies providing the financial advice rather than employees". Consequently, there was a greater need for specific and general deterrence as well as public protection.[123]
15. The applicant says he was "not a senior member or leader in the UGC business for the first 2 years of his employment" and "played no role in the development of UGC's business model".[124]
16. Further, in oral submissions, Counsel for the applicant said the position was not straightforward. However, the applicant's reliance on the employer's instructions should be considered as a mitigating factor and/or lessens culpability for the purpose of deterrence.[125]
17. This is not a case where the applicant says a ban is not appropriate. In my view, this concession was properly made.
18. The actions of the applicant should be regarded as serious, involving conduct that was misleading, and which contravened the Act, for which the applicant is personally responsible.
19. In reaching this conclusion, I do not accept that, during the period he implemented the UGC business model, his role and position should properly be categorised as a junior employee. This is contrary to his prior education and work experience and at odds with the fact he was training and/or supervising at least one other person, Mr Rogers, during the relevant period.
20. The applicant's culpability is demonstrated by the following:

(a) The applicant had concerns about the UGC business model but took no action to raise those concerns with his superiors or have them addressed; > > (b) Despite these concerns, he continued to implement the UGC business model without sufficient regard to the communications he was receiving from the Clients. > > (c) The evidence concerning communications with the Clients demonstrate they were told and were entitled to expect the applicant would act in their best interests. This did not occur. Rather, advice was being given without undertaking proper analysis of the individual investment strategies, the risks associated with those strategies, and each Client's goals. > > (d) A competent person in the position of the applicant, reading the letter of engagement and considering the communications to and from the Clients, would have done so.

21. The impugned services were provided directly by Mr Petrovic to the clients. He did not seek direction from his superiors, nor did he ask for them to review his advice.
22. In these circumstances he is accountable for his conduct.
23. Further, as I have found above, the applicant does not now appear to recognise, or at least fully accept his own responsibility. Rather, he continues to submit that the actions of his superiors significantly reduces his own culpability.
24. Taken together, these matters warrant a ban being imposed.
25. Features of the conduct fit within the "Outcome" range in RG 98 of 3 to 10 year. In the present case, the conduct demonstrates incompetence and is beyond what I would call mere carelessness. This is because, despite any training provide in support of the UGC business model, Mr Petrovic should, but failed to, have regard to what he was saying to and what he was told by the Clients. Consequently, he failed to meet his obligations owed to the Clients.
26. However, there was no dishonestly, no loss to clients claimed, and no personal gain to Mr Petrovic. Consequently, any ban should be at the lower end of the scale. As such, in my view a 6 year ban is excessive.
27. The fact the applicant had received training in the UGC business model and was told that legal signoff had been provided is a matter relevant in considering the degree of culpability. However, as his acknowledgement of the evidence of Mr Coppenhagen demonstrates, it was the applicant who bore responsibility for what was said to the particular clients as it the applicant who signed the SOAs in question and dealt with the Clients.
28. Also relevant is the applicant's evidence of the financial impact the banning order has, and will have, on his ability to earn an income and provide for his family and the fact he has not otherwise been the subject of disciplinary action.
29. In determining what order should be made, there are features of this case that are similar to Atkins.[126] There a 3 year ban was imposed.
30. There are also differences. For example, when first dealing with ASIC, the applicant denied he had breached certain of his obligations, whereas it appears "[at] all times, [Mr Atkins] has cooperated with the investigations by Magnitude and ASIC". Also, unlike Mr Petrovic (who in evidence ascribed blame to UGC for misleading him rather than accepting responsibility for his personal communications with Clients), it seems Mr Atkins understood and accepted the full extent of his errors.[127] On the other hand, Mr Atkin had been in the industry longer and held higher positions than Mr Petrovic
31. The features of the present case lead me to the conclusion that the ban should be protective and provide for both specific and general deterrence. The protective requirement arises from the need for Mr Petrovic to address the matters of continuing concern to which I have referred. No doubt further training will assist.
32. As to deterrence, there is a need for those involved in the industry to ensure their obligations are met, regardless of their seniority or position. Members of the public are entitled to expect those within the industry and with whom they deal will maintain the highest standards.
33. Having regard to the above, I have determined a 3 year ban is appropriate.

1. The decision of the respondent made on 24 January 2025 is varied from a ban of a period of 6 years to a ban of a period of 3 years, such period commencing 24 January 2025. Otherwise, the terms of the banning order remain unaltered.

[11] respondent's SFICs at [45]-[50]

[12] AB 58 and following, commencing at paragraph 26

[14] TD 2636 and following at TD 2641, summarised in Reasons at [80]

[20] Reasons paragraph 82 and following

[22] respondent's submissions paragraph 87-88

[42] Transcript 1 July 2025 page 174 line 7

[44] May statement [56] and following

[46] May statement at [66] and following

[47] Transcript 30 June 2025 page 22 line 42

[48] Transcript 30 June 2025 page 24 following

[50] Transcript 30 June 2025 page 28 line 40

[51] Transcript 30 June 2025 line 1 and following

[52] Transcript 30 June 2025 page 35 line 21 and following

[53] Transcript 1 July 2025 page 101 line 35 and following

[54] Transcript 30 June 2025 page 45 line 35 and following

[55] Transcript 30 June 2025 page 46 line 6 and following

[57] Transcript page 63 line 19 and following

[58] Transcript 30 June 2025 page 66 line 5 and following

[59] Applicant's written submissions to ASIC dated 15 May 2024 - TB 172, particularly at page 16 and following

[60] Transcript 30 June 2025 page 80 line 41 following

[61] Transcript 1 July 2025 page 92 line 37 and following

[62] Transcript 1 July 2025 page 94 line 13 and following

[63] Transcript 1 July 2025 page 95 line 1

[68] Transcript 1 July 2025 page 123 line 45 and following

[69] Transcript 1 July 2025 page 136 line 38 and following

[70] Transcript 1 July 2025 page 137 line 1 and following

[71] Applicant's written outline of submissions dated 20 June 2025 at [2]

[72] Applicant's written outline of submissions dated 20 June 2025 at [5]-[7]

[73] Applicant's written outline of submissions dated 20 June 2025 at [23] and following

[74] Applicant's written outline of submissions dated 20 June 2025 at [35] and following

[75] Applicant's written outline of submissions dated 20 June 2025 at [42]

[76] Applicant's written outline of submissions dated 20 June 2025 at [43]

[77] Applicant's written outline of submissions dated 20 June 2025 at [45]

[78] Applicant's written outline of submissions dated 20 June 2025 at [48] and following

[79] Applicant's written outline of submissions dated 20 June 2025 at [54]

[80] Applicant's written outline of submissions dated 20 June 2025 at [56]-[57]

[81] Transcript 2 July 2025 page 166 line 40 and following

[82] Transcript 2 July 2025 page 118 line 7 and following

[83] Transcript 2 July 2025 page 108 line 2 and following

[84] Transcript 2 July 2025 page 119 line 43 and following

[85] Transcript 2 July 2025 page 121 line 35 and following

[86] Transcript 2 July 2025 page 123 line 13 and following

[87] Transcript 2 July 2025 page line 24

[88] Panganiban v Australian Securities and Investments Commission [2016] FCA 510 at [15]

[89] Transcript 2 July 2025 page 138 line 12 and following

[90] See eg Client 1 SOA - TB 2647 (UNG.0017.0007.8302)

[94] Position Statement in respect of s 961J

[95] Respondent' SFICS paragraph 145 and following

[97] Applicant's reply to the Respondent's SFICS paragraph 66

[98] (1978) 140 CLR 216; [1978] HCA 11

[99] Transcript 2 July 2025 page 167 line 37 and following

[100] Transcript 2 July 2025 page 121 line 9

[101] Transcript 30 June 2025 page 6 line 22

[102] [2024] AATA 2006 at [155]- [156]

[103] Applicants' reply to the respondent's SFICS at [48

[104] Applicant's SFICS at [68] and following.

[106] Applicant's Reply to the respondent's SFICS at [49]

[107] Applicant's Reply to the respondent's SFICS at [35]

[108] Respondent's SFICS at [126]-[127]

[109] Applicant's Reply to the respondent's SFICS at [63]

[110] [2024] AATA 2006 at [208]- [209]

[111] [2019] AATA 6806 at [674]

[112] [2021] AATA 1545 at [188]

[114] Applicant's Reply to the respondent's SFICS at [72]

[115] [2004] HCA 42; (2004) 220 CLR 129

[116] [2002] NSWSC 483; (2002) 42 ACSR 80

[117] Respondent's SFICS at [171 and following

[118] (2013) 62 AAR 192; [2013] AATA 926 at [20]- [21]

[120] Respondent's SFICS at [184] and following

[121] [2018] AATA 3223

[122] Applicant's SFICS at [68] and following

[123] Applicant's Reply to the respondent's SFICS at [75]

[124] Applicant's Reply to the respondent's SFICS at [77]-[78]

[125] Transcript 2 July 2025 page 179 line 24

[126] Atkins at [82] and following