ASIC cancels Financial Services Group Australia's AFSL

ASIC has cancelled the AFSL of Financial Services Group Australia (FSGA), which has links to the Shield Master Fund and First Guardian Master Fund. FSGA's responsible manager (RM) Graham Holmes has also been permanently banned from working in the industry.

Ferras Merhi was the sole director of FSGA from 10 February 2021 to 30 May 2025. He is also the director of Venture Egg Financial Services and United Financial Advice.

ASIC is currently investigating Merhi and various entities associated with him in connection with its investigations concerning the two funds.

Certain authorised representatives of FSGA provided personal financial product advice to consumers who invested in the Shield Master Fund and the First Guardian Master Fund.

ASIC said it cancelled FSGA's licence on June 7 for failing to take reasonable steps to ensure that two of its representatives provided financial product advice that was appropriate to the client's circumstances or in the client's best interests, in relation to certain instances of advice.

Among the other failures, FSGA did not have adequate financial and human resources to provide the financial services covered by the licence and to carry out supervisory arrangements or maintain the competence to provide the financial services covered by the licence.

For the 2022 and 2023 financial years FSGA did not lodge its financial statements and auditor's reports on time or breach reports with ASIC. FSGA did not comply with a condition on its licence that required to have total assets that exceeded total liabilities.

As for Holmes, ASIC said he contravened financial services law via FSGA for failing to take reasonable steps to ensures its representatives acted in the best interests of clients and to give appropriate advice to clients.

Holmes accepted to be FSGA's responsible manager 'on paper' only and to receive responsible manager fees, when he knew he was not fulfilling his duties.

ASIC said it "had reason to believe Holmes is not a fit and proper person to participate in the financial services industry."

FSGA and Holmes can apply to the Administrative Review Tribunal to review ASIC's decisions.

While its AFSL is now cancelled, ASIC specified that FSGA must remain a member of the Australian Financial Complaints Authority (AFCA) and maintain professional indemnity insurance until 4 June 2026.