ASIC bans financial advisers 11 May

ASIC has adopted a practice of issuing combined media releases about administrative action. There is no relationship between the matters or the subjects in this media release, except that ASIC has taken administrative action.

Banning of Christopher Norman Harris

ASIC has banned Adelaide-based financial adviser Christopher Norman Harris from providing financial services for ten years.

From October 2008 to May 2017, Mr Harris was an authorised representative of Millennium3 Financial Services Pty Ltd (Millennium3), which was owned by ANZ at the time. He was an authorised representative of Dover Financial Advisers Pty Ltd (Dover) from May 2017 to June 2018.

ASIC’s review of advice provided by Mr Harris while he was an authorised representative of Millennium3 and Dover found that:

  • some of his advice was not in the best interests of his clients;
  • he failed to provide statements of advice (SOAs) to some clients; and
  • he failed to provide the appropriate Fee Disclosure Statements (FDSs) in a timely manner.

In June 2018, Futuro Financial Services Pty Ltd appointed Money Works Financial Planning Pty Ltd (Money Works) as its corporate authorised representative. Mr Harris is the sole director of Money Works, but at the time of the appointment he was not himself authorised to provide financial services.

In statements made on the Money Works website and in correspondence to clients, Mr Harris gave the false impression that he was authorised to provide financial services. ASIC found that by doing so, Mr Harris had engaged in conduct that was likely to mislead or deceive.

Mr Harris has requested a review of ASIC’s decision in the Administrative Appeals Tribunal.

Banning of Bimaljeet Sekhon

ASIC has banned southeast Melbourne-based financial adviser Bimaljeet Sekhon from providing financial services for three years.

From June 2013 to July 2017, Ms Sekhon was an authorised representative of Count Financial Limited, which was owned by the Commonwealth Bank of Australia at the time. She was an authorised representative of Politis Investment Strategies Pty Ltd between November 2017 and March 2019.

ASIC found that Ms Sekhon failed to comply with financial services laws, including failing to provide advice that was in the best interests of her clients. ASIC also found that Ms Sekhon was not adequately trained or competent to provide financial services.

A review of Ms Sekhon’s advice showed that she failed to make reasonable inquiries into, and base all judgements on, her client’s relevant circumstances, and to appropriately scope the advice. Ms Sekhon failed to consider some clients’ existing insurance arrangements and the potential impact of the recommended products’ premiums on her clients’ retirement savings.

Financial advisers must act in the best interests of their clients when providing personal advice. This includes taking reasonable steps to understand their clients’ personal circumstances and exploring existing and other available financial products to ensure they are providing advice that meets their clients’ objectives.

Ms Sekhon has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC’s decision.

Banning of Alan Davies

ASIC has banned Sydney-based financial adviser Alan Davies from providing financial services for three years.

From December 2013 to March 2020, Mr Davies was the sole director and an authorised representative of Risk Insurance Consultants Pty Ltd.

An ASIC surveillance found that Mr Davies did not comply with financial services laws and he was not adequately trained or competent to provide financial services.

Specifically, ASIC found that Mr Davies had failed to properly investigate and document his clients’ relevant financial objectives and personal circumstances when providing life insurance advice. When recommending that his clients switch insurance products, Mr Davies also failed to consider whether a switch was in his clients’ best interests and whether his clients could have achieved their objectives within their existing insurance products.

Financial advisers must consider their clients’ circumstances when providing advice. When recommending that a client switch their life insurance product, advisers must fully consider the risks of switching products and whether the new product will meet the client’s objectives.

Mr Davies has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC’s decision.

Background

ASIC banned Mr Harris, Ms Sekhon and Mr Davies as part of its ongoing efforts to improve standards across the financial services industry. The bannings will be recorded on ASIC’s publicly available Financial Advisers Register and on the Banned and Disqualified Persons Register.

The bannings of Mr Harris and Ms Sekhon fall within ASIC’s Wealth Management Major Financial Institutions Portfolio. The Portfolio focuses on the financial services conduct of Australia’s largest financial institutions (NAB, Westpac, CBA, ANZ, Macquarie and AMP) with respect to credit and retail lending, financial advice, fees for no service, superannuation trustees, insurance, unfair contract terms and other licensee obligations.

Examples of Mr Harris’ advice were provided as case studies during the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.

ASIC’s decision to ban Mr Davies is a result of work ASIC undertook as part of its Life Insurance Lapse Data (LILD) Project. ASIC has investigated a number of financial advisers including Mr Davies, following a review of data provided to ASIC by life insurers.

Under the LILD Project, ASIC collected information from life insurers that listed the names of advisers who met specific thresholds relating to lapsed policies. ASIC analysed this information and other data to identify a group of high-risk advisers. This enabled ASIC to target its surveillance activity. ASIC then reviewed the quality of advice provided by the advisers to determine whether they were acting in their clients’ best interests.

ASIC’s Moneysmart website has useful information for consumers about choosing a financial adviser, how to complain about a financial adviser, and what to do if their adviser is banned.

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