ASIC has banned financial adviser Frazer Jon Muscat from providing financial services for a period of five years after an ASIC review of Mr Muscat’s advice found that he had failed to take into account his clients’ individual circumstances because he used a templated approach for all clients.
The surveillance by ASIC looked at advice Mr Muscat provided to clients when he was an authorised representative of Bristol Street Financial Services Pty Ltd.
In a public statement, ASIC said Mr Muscat 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,” it said.
“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.”
ASIC said that by 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.
ASIC commissioner Danielle Press said that 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,” Mr Press said.
Mr Muscat has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC’s decision.
This latest announcement follows the banning of another adviser earlier this week who received a permanent ban after ASIC found he had prioritised his own interests over those of his clients by providing inappropriate advice that maximised the amount of fees and commissions paid by clients.
The comment from ASIC is that “In many cases, his recommendations were at complete odds with his clients’ current objectives and needs,” Surely (1) the client would know that and (2) the client may not be correct.
I’ve had lots of people tell me they don’t need income protection, TPD and trauma insurance, I’ve even had a few tell me god will look after their families, but that doesn’t mean they are right.
I hope there is more to this than indicated by the comments made by ASIC.
Headline should read “An Independent financial adviser has been banned from providing financial services for five years” Why do they never say that?
This means ASIC should therefore ban every INDUSTRY FUND adviser on exactly the same grounds!! What ASICk joke this regulator is!!!