ASIC has banned Melbourne-based financial adviser Ashok Sherwal from providing financial services and performing any function in a financial services business for six years.
Mr Sherwalwas provided superannuation strategies, consolidation, and rollover along with affiliated SMSF offering.
ASIC found Mr Sherwal advised clients in need of cash to replace their existing insurance and superannuation products, as well as to take out new insurance products so that he could generate advice fees and insurance commissions.
Mr Sherwal then used some of the fees and commissions he received to make cash payments to these clients.
“Mr Sherwal failed to identify the scope of the advice being sought by his clients, did not obtain complete and accurate client information, or base his judgment on his clients’ relevant circumstances,” ASIC stated.
“These failures led to his clients receiving inappropriate advice that resulted in their superannuation balances being significantly eroded.
“Mr Sherwal also failed to comply with the additional disclosure requirements when providing product switching advice.”
In making its decision, ASIC found that Mr Sherwal misunderstood what the best interests duty required of him and demonstrated an inability to follow fundamental and proper financial advice processes.
ASIC found Mr Sherwal prioritised his own interests above those of his clients, and he did not exercise the degree of professionalism and judgment demanded of financial advisers. ASIC also found that Mr Sherwal is not a fit and proper person due to his serious lack of professionalism and judgment.
Mr Sherwal’s banning is recorded on ASIC’s publicly available Financial Advisers Register and the Banned and Disqualified Persons Register.
Mr Sherwal has appealed to the Administrative Appeals Tribunal for a review of ASIC’s decision. The outcome has not yet been determined.
Mr Sherwal has been an authorised representative of a number of advice licensees. The conduct that resulted in this banning relates to Mr Sherwal’s activities when he was an authorised representative of Wealth & Risk Management (22 July 2015 – 4 May 2016) and Dover Financial Advisers (6 March – 23 October 2017).
