The Federal Court also permanently banned Financial Circle from the financial services industry after it was found to have engaged in numerous contraventions of financial services, credit and consumer protection laws.

The court found that between September and December last year, the firm offered personal loans up to $5000 to clients with the condition they receive and implement financial advice.

The advice typically recommended switching to a self-managed superannuation fund and buying insurance.

Financial Circle would then collect commissions and fees paid from clients' super, according to ASIC.

This process often resulted in a substantial erosion - in many cases up to 30 per cent - of the client's superannuation balances.

Justice David O'Callaghan also found the firm engaged in a credit activity without a licence.

In addition to the $8.9 million fine, he ordered it pay costs incurred by prosecutor ASIC.

Australian Associated Press