ASIC has cancelled the Australian Financial Services (AFS) licence of Financial Services Group Australia Pty Ltd (FSGA), effective 7 June 2025 and permanently banned FSGA's Responsible Manager (RM) Graham Holmes.
Licensee failings
ASIC cancelled the AFS licence of FSGA after ASIC determined that FSGA had failed 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
- have available adequate financial and human resources to provide the financial services covered by the licence and to carry out supervisory arrangements
- maintain the competence to provide the financial services covered by the licence
- lodge its financial statements and auditor's reports on time
- lodge breach reports with ASIC, and
- comply with a condition on its licence that required FSGA to have total assets that exceeded total liabilities, in respect of financial years 2022 and 2023.
Although the FSGA licence is cancelled, ASIC specified that FSGA must still remain a member of AFCA and maintain professional indemnity insurance until 4 June 2026.
Actions to consider if you are a client of FSGA
If you are a client of FSGA and have concerns about the conduct of your adviser or the advice you received, you should consider lodging a complaint with the Australian Financial Complaints Authority (AFCA). AFCA is the external dispute resolution scheme for financial complaints in Australia and must deal with complaints independently and fairly. AFCA's service is free for consumers.
AFCA can be contacted by:
- calling 1800 931 678 for free (9am - 5pm Melbourne time), or
- lodging a complaint online on AFCA's website.
AFCA will consider your complaint if it meets the eligibility criteria.
Important deadline: In cancelling FSGA's licence, ASIC required FSGA to remain a member of AFCA until 4 June 2026. If you intend to lodge a complaint with AFCA in relation to advice received from FSGA you should do so by 4 June 2026.
Responsible Manager failings
ASIC also permanently banned FSGA's RM Graham Holmes from providing any financial services, performing any function involved in the carrying on of a financial services business, and controlling an entity that carries on a financial services business.
ASIC found that Mr Holmes had been involved in the contravention of a financial services law by FSGA, including FSGA's failure to take reasonable steps to ensures its representatives acted in the best interests of clients and to give appropriate advice to clients.
ASIC also found that Mr Holmes had accepted to be FSGA's RM 'on paper' only and to receive RM fees, when he knew he was not fulfilling his duties as an RM. ASIC therefore had reason to believe Mr Holmes is not a fit and proper person to participate in the financial services industry.
The responsible manager's role is derived from the obligation in s 912A(1)(e) of the Corporations Act 2001 for AFS licensees to establish and maintain organisational competence to provide the financial services offered by the AFS licensee.
Individuals who are nominated by AFS licensees as responsible managers must have direct responsibility for significant day-to-day decisions about the financial services the licensee provides.
FSGA and Mr Holmes have the right to apply to the Administrative Review Tribunal for a review of ASIC's decisions.
Mr Holmes' banning is recorded on ASIC's banned and disqualified register.
Background
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.
Ferras Merhi was the sole director of FSGA from 10 February 2021 to 30 May 2025. ASIC is investigating Mr Merhi and various entities associated with him, in connection with its investigations concerning the Shield Master Fund and the First Guardian Master Fund. These investigations are ongoing. ASIC has also taken action to freeze Mr Merhi's assets: 25-024MR Federal Court freezes assets of Melbourne financial adviser, Ferras Merhi of Venture Egg and FSGA.
ASIC's investigations into the matters connected to the Shield Master Fund and the First Guardian Master Fund are continuing. ASIC will provide updates on these matters on its Enforcement Activities page.
More information
- Regulatory Guide 105 AFS licensing: Organisational competence
