The Australian Securities and Investments Commission (ASIC) has banned Kimberley Holgate of Wagga Wagga, NSW, from providing financial services for five years. Ms Holgate was an authorised representative of Commonwealth Financial Planning Limited from January 2014 to October 2015.
ASIC found that Ms Holgate engaged in conduct that was likely to mislead – cutting clients’ signatures from documents held on file and pasting them onto new documents.
It also found that she did not act in the best interests of her clients when advising they rollover their existing super to a new product issued by Colonial First State, a related entity of the Commonwealth Bank of Australia.
She also failed to act in the best interests of her clients when advising them to cancel existing insurance policies and apply for personal insurance issued by CommInsure, and when telling them to acquire financial products which entitled her, her employer and its related entities to a financial benefit, said the corporate regulator.
“The super advice provided by Ms Holgate did not result in any improvement to the clients’ current financial position,” said ASIC.
Ms Holgate has to the right to apply to the Administrative Appeals Tribunal for a review of ASIC’s decision.
Multiply Ms Holgate’s efforts by 1,000’s of financial planners [so called] employed by the big 4 banks, & you have the crux of the problem – no independence of advice from investment & life product issuers. This can lead to very poor advice & financial outcomes for their customers, for whom they are supposed to help!. All bank financial planning companies should be wound up. Their clients’ files should be handed over to independent dealer groups for free.
Wow. So your answer is that independent dealer groups should be given millions of dollars of free client commissions. No prizes for guessing who you work for.
However, given that independent FP’s are regularly disciplined and even jailed for shoddy practices, who shall we give all the independent dealer groups files to?
Sales based remuneration structures will often lead to Adviser’s best interest trumping the client. The banks are not the only FP firms ‘guilty’ – a reasonable view of a firm’s culture can be gleaned where the clients are referred to as ‘customers’ and advice is product led rather than strategy with product solutioning.
Advisers are presumably grown ups and can choose to work in sales based rem environments. If they get too ‘incentive focused’ and loose sight of the client, that is not the employer’s fault. On the other hand, the grown-up can make a different choice if they feel conflicted. The days of the ‘nanny state’ where we need saving from ourselves is past.
The professional of financial planning is still emerging from it’s origins of life insurance sales. It has come a long way but, the journey is still in progress.
As usual, when ASIC deals with a bank, a slap on the wrist with a wet lettuce. Any other licensee would have had their licence cancelled, not so of course a bank. Who supervised her? Who pressured her to transfer to CBA related products? Who performed the audit and never noticed anything? Many more such questions could be asked, but when a bank is involved ASIC doesn’t ask them….