ASIC bans financial advisers

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.

ASIC permanently bans former Spectrum Wealth financial adviser

ASIC has permanently banned Dunlop, ACT-based financial adviser Jane Elizabeth Myers from providing financial services.

This follows an ASIC surveillance of Ms Myers when she was an authorised representative of Spectrum Wealth Advisers Pty Ltd between October 2013 and March 2017.

Ms Myers claimed that she was only facilitating the establishment of self-managed superannuation funds (SMSFs) for her clients, rather than providing financial product advice. However, ASIC’s surveillance found that Ms Myers gave her clients financial product advice recommending they establish SMSFs and roll over their existing superannuation into SMSFs. In doing so, she did not act in her clients’ best interests or provide advice that was appropriate to their circumstances. Specifically, Ms Myers failed to:

  • identify her clients’ relevant circumstances;
  • investigate whether the SMSF would achieve the clients’ financial objectives beyond their desire to purchase property;
  • reasonably inform her clients of all associated costs of holding a property within an SMSF; and
  • provide her clients with statements of advice.

In one instance, Ms Myers advised her client to roll over existing life insurance to the newly established SMSF. As a result, the client lost life insurance cover and subsequently the client’s spouse did not receive the insurance payout.

ASIC found Ms Myers is not adequately trained or competent to provide financial services and that she is likely to contravene a financial services law in the future. Her conduct demonstrated serious incompetence and irresponsibility.

ASIC expects financial advisers to understand and comply with their obligations under the law. When providing personal advice, advisers are required to act in the best interests of their clients, not simply implement their clients’ instructions.

Setting up an SMSF is a significant financial step for consumers and impacts their retirement savings. Advisers must take their clients’ personal circumstances and objectives into account before making recommendations or assisting clients with the establishment of SMSFs.

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

ASIC bans New South Wales adviser for three years

ASIC has banned New South Wales-based financial adviser Alexander Bruce Thomas from providing financial services for three years.

Mr Thomas was an authorised representative of National Australia Bank Limited between June 2008 and March 2017, and of Forsyths Financial Services Pty Ltd between September 2017 and October 2019.

ASIC found that Mr Thomas failed to comply with financial services laws, including failing to provide advice that was in the best interests of his clients.

A review of a sample of Mr Thomas’ advice files showed that he failed to make reasonable inquiries into, and base all judgements on, his client’s relevant circumstances, and to appropriately scope the advice.

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 financial products to ensure they are providing appropriate advice that meets their clients’ objectives.

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

Background

The bannings of Ms Myers and Mr Thomas are part of ASIC’s ongoing efforts to improve standards across the financial services industry. They will be recorded on ASIC’s publicly available Financial Advisers Register and the Banned and Disqualified Persons Register.

Spectrum Wealth Advisers Pty Ltd held AFS licence no. 334400. The licence was cancelled as of 14 February 2020 and Spectrum is no longer providing financial services. ASIC’s website has more information about Spectrum.

The banning of Mr Thomas falls 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 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.

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. Consumers can also find out more about SMSFs at Moneysmart.

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