ASIC has banned Beenleigh financial adviser Frazer Jon Muscat from providing financial services for a period of five years following an ASIC surveillance.
The surveillance looked at advice Mr Muscat provided to clients when he was an authorised representative of Bristol Street Financial Services Pty Ltd.
ASIC’s review of Mr Muscat’s advice found that he failed to take into account his clients’ individual circumstances because he used a templated approach for all clients. He developed an ‘insurance needs calculation template’, which recommended his clients apply for levels of insurance that were higher than their circumstances required. In many cases, his recommendations were at complete odds with his clients’ current objectives and needs.
Mr Muscat also switched the superannuation accounts of some clients from one provider to another without investigating their existing arrangements. In other cases, he recommended switching to a more expensive product without demonstrating that the switch would be in his clients’ best interests.
In focusing his advice on switching insurance and superannuation, Mr Muscat also failed to provide advice on other relevant areas specifically requested by his clients, such as debt reduction and cash flow management.
The banning order for Mr Muscat has been recorded on ASIC’s publicly available Financial Advisers Register, which consumers can access to check the qualifications and credentials of financial advisers.
ASIC Commissioner Danielle Press said, “When providing personal advice, ASIC expects financial advisers to take reasonable steps to understand their clients’ individual circumstances, needs and objectives before making any recommendations.
“Advisers have a legal obligation to act in the best interests of their clients at all times and, because client circumstances often vary considerably, using a templated approach will not produce the most appropriate advice recommendations in all instances,” Ms Press said.
ASIC’s MoneySmart website has useful information on life insurance, including a calculator to help consumers work out whether they need life cover and what level of cover is appropriate. The website also has information about what to do if their adviser has been banned.
Mr Muscat was an authorised representative of Bristol Street Financial Services between 5 August 2010 and 6 December 2018. He was also a responsible manager of Bristol Street Financial Services’ Australian financial services (AFS) licence, which was cancelled by ASIC on 10 December 2018 (18-373MR).
Mr Muscat has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC’s decision.