Federal Court orders $925,000 penalties for conflicted remuneration linked to SMSF and property referrals

A Federal Court decision published on 19 December 2025 imposed penalties totalling $925,000 on Australian financial services licensee RM Capital Pty Ltd and its authorised representative, The SMSF Club Pty Ltd, for conflicted remuneration breaches. The Court ordered RM Capital to pay $575,000 and SMSF Club to pay $350,000.

The penalties follow earlier findings made by the Court in February 2024. The Court found that RM Capital failed to take reasonable steps between August 2013 and August 2016 to ensure that SMSF Club did not accept conflicted remuneration. The Court also found that, on multiple occasions between November 2014 and July 2016, SMSF Club accepted conflicted remuneration.

The conduct concerned referral fees paid by the real estate agent, Positive RealEstate Pty Ltd. The Court found SMSF Club received a total of $135,863.65 in referral fees from Positive RealEstate for assisting SMSF Club clients to set up a self-managed superannuation fund and purchase property from Positive RealEstate. These referral fees were paid under a referral agreement between SMSF Club and Positive RealEstate.

On each occasion it accepted a referral fee, SMSF Club breached the Corporations Act provision that prohibits an authorised representative from accepting conflicted remuneration. As the licensee that authorised SMSF Club to provide financial services, RM Capital contravened section 963F of the Corporations Act by failing to take reasonable steps to ensure SMSF Club did not accept the payments.

In comments included with the decision, ASIC Deputy Chair Sarah Court said the Court’s judgment reflected RM Capital’s systemic failure to uphold consumer protection safeguards over a sustained three-year period, and that RM Capital should have provided proper oversight of SMSF Club in relation to compliance with the conflicted remuneration provisions. The Deputy Chair also noted that conflicted remuneration can lead consumers to be given financial product advice weighted to the provider’s interests and may not suit consumers’ needs.

Justice Jackson’s reasons, as quoted, emphasised that even though RM Capital was a small organisation with limited resources, its responsibilities as an Australian financial services licence holder were core responsibilities. The Court also noted RM Capital’s passive approach even after an ASIC investigation, an adverse liability judgment, and an approaching penalty hearing, and stated that a high penalty may be necessary to motivate a change in approach.

The Court also made orders aimed at strengthening future compliance. Within six months, RM Capital must provide ASIC with a written report from an independent expert stating whether it has appropriate systems, policies, and procedures in place to ensure that its representatives comply with section 963G(1) of the Corporations Act. SMSF Club must also provide ASIC with a written report from an independent expert stating whether it has appropriate systems, policies, and procedures to ensure it complies with section 963G(1).

The background to the matter includes ASIC commencing civil proceedings against RM Capital and SMSF Club on 7 June 2019. SMSF Club later filed joint submissions and a statement of agreed facts with ASIC, including admissions by SMSF Club of contraventions of section 963G of the Corporations Act. The Court’s earlier liability findings against RM Capital were made on 29 February 2024.

Source: 25-313MR Federal Court orders $925,000 in penalties against RM Capital and SMSF Club for conflicted remuneration breaches | ASIC