Allegra Financial Services has lost its appeal against a decision by the Australian Securities and Investments Commission (ASIC) to deny the financial planning and advice firm a licence to operate.

The Administrative Appeals Tribunal (AAT) ruled it was not satisfied that Lachlan Schonfelder – Allegra’s controller, sole controller and proposed responsible manager – would engage in honest and fair conduct, having reviewed his handling of client relationships in the past.

It says he accepted a loan from a client to pay off a debt when he was an authorised representative of another licensee – an action that led to his employment being terminated.

AAT says the “whole transaction [was] deeply problematic”, even if one assumed it was the client who proposed to help him with the debt repayment.

“It was clearly not appropriate for a person in [his] position to accept it,” the tribunal says. “At a minimum, the evidence establishes Mr Schonfelder had lost perspective about his role as a professional adviser and exercised exceptionally poor judgment in his dealings with a client.”

In his licence application in April 2018 for Allegra, Mr Schonfelder also provided misleading information to ASIC surrounding the circumstances of his departure from his ex-employer.

ASIC Commissioner Danielle Press says the AAT decision is a clear reminder to applicants that they must deal openly and honestly and provide full and frank disclosure to ASIC when applying for a licence and responding to requests for additional information

Allegra has 28 days to appeal the AAT’s November 30 decision to the Federal Court of Australia on a question of law.

Click here for the AAT decision.