The Australian Securities and Investments Commission (ASIC) has taken a Melbourne financial advice business to court for failing to act in consumers’ best interests.

The Federal Court action is against Wealth & Risk Management (WRM), Yes FP and Yes FS.

ASIC is seeking a declaration of contraventions, and financial penalties.

WRM advises on life insurance and superannuation. Its advisers are employed by Yes FP, whose clients are referred by Yes FS.

The company offered fast loans, but to be eligible customers had to replace their super fund with a retail product recommended by WRM, and either buy or switch their life insurance policies to one recommended by the adviser.

None of this was disclosed on the Yes FS website, ASIC alleges.

Life insurance commissions paid to WRM were then paid to the parent of Yes – JECA – as part of a referral agreement.

ASIC argues WRM did not act in clients’ best interests, dating back to December 2015. The advice was also inappropriate and conflicted, it says.

Court documentation says WRM did not provide training on Future of Financial Advice requirements that include the best-interests duty.

ASIC claims Yes FS has operated without an Australian financial services licence and engaged in misleading and deceptive conduct.

The first court hearing will be on March 31.