Adviser Banned Over $85m Super Scheme Tied to Property

A Melbourne financial adviser has been banned for six years for steering $85 million in retirement savings into a property fund now in liquidation.

The Australian Securities and Investments Commission (ASIC) said Milutin Petrovic, a former United Global Capital (UGC) adviser, told clients to set up self-managed superannuation funds and invest heavily in the Global Capital Property Fund (GCPF).

It invested in 15 property development projects across Australia, with 14 ongoing at the time of the Federal Court’s decision.

In June 2024, the Federal Court issued freezing orders over the assets of both UGC and GCPF to protect investor money.

UGC, which held an Australian Financial Services licence since 2017, went into voluntary administration the following month.

Creditors voted to wind it up in August 2024.

The Federal Court ordered GCPF into liquidation in October 2024. Liquidators reported about $16 million in assets remained at the time.

One confirmed asset was the proposed River Glen subdivision in Maclean, New South Wales—a planned 157-lot estate. 

Local reporting in the Clarence Valley Independent said deposits had been taken on at least 20 lots before the fund’s liquidation.

The site was reportedly sold for $7.7 million in March.

▲ An aerial image of the River Glen subdivision at Maclean, an asset of the failed Global Capital Property Fund later sold for $7.7 million.

ASIC said Petrovic “failed key advice obligations when recommending clients to invest their retirement savings into financial products related to his licensee, United Global Capital Pty Ltd”.

The regulator said Petrovic “asserted to clients he was only providing limited advice as they sought ‘execution only advice’, despite telling clients he was required to act in their best interests”. 

It said he also compared their existing super funds with the returns he claimed they could achieve through an SMSF invested in GCPF.

ASIC found Petrovic did not act in his clients’ best interests, did not provide appropriate advice, did not prioritise their interests ahead of UGC’s, made misleading statements and gave defective Statements of Advice.

“By purporting to limit the advice in the manner he did, Mr Petrovic provided clients with Statements of Advice that were defective and therefore engaged in misleading and deceptive conduct regarding acting in clients’ best interests and estimates of future return representations of GCPF,” ASIC said.

The ban took effect on January 15, was paused on February 28 and resumed on March 26 when the pause was lifted.

Petrovic is challenging the decision in the Administrative Review Tribunal, which heard the case in late June and early July.

A decision is pending.

The enforcement follows ASIC’s 10-year ban on UGC’s sole director Joel Hewish, upheld by the Tribunal in August.

The court described Hewish’s advice model—cold-calling consumers for “super health checks”, encouraging rollovers into SMSFs and investing in the related fund—as “hopelessly conflicted” and contrary to clients’ best interests.

SMSFs hold more than $1 trillion in assets, including property, shares and trusts, among other investments, according to the Australian Taxation Office.