ASIC has cancelled the AFSL of managed accounts provider Jade Capital Partners and banned one of its directors.
An ASIC investigation of Sydney-based Jade Capital, a managed discretionary account provider specialising in trading services and advice, uncovered widespread non-compliance practices.
Jade Capital advertised misleading information on returns, fees and costs, performance history and results relating to MDA strategies on its website and video presentation, ASIC said.
ASIC determined the advertised MDA returns were "likely to mislead potential investors into believing the returns were based on actual returns when this was not the case."
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The advertised fees and costs also had the potential lead investors to believe Jade Capital would only receive income if an investor made profits when, in fact, Jade Capital received transaction fees from trading on behalf of clients under an MDA arrangement.
Claims about performance in the video presentation were also likely to mislead investors into thinking the MDA strategies managed by Jade Capital had been generating consistently good results, it said.
ASIC banned Jade Capital director James Clinnick from providing financial services four years for engaging in misleading and deceptive conduct.
The AFSL cancellation took effect on 11 January 2019. ASIC has given Jade Capital until 30 April 2019 to terminate its existing client arrangements. The firm and Clinnick have the right to appeal ASIC's decision.
ASIC commissioner Danielle Press warned all consumers considering MDAs to evaluate the risks and benefits of an MDA.
"Consumers should ensure they have a good understanding of all the fees and charges, and carefully consider the scope of authority they are giving to their adviser," she said.