Adviser receives permanent ban over super switching advice
ASIC has permanently banned a financial adviser from providing financial services and engaging in credit activities after he advised clients to switch their superannuation without taking their needs and objectives into consideration.
Former Westpac adviser Subeer Luthra has been banned from providing financial services and engaging in credit activities because of his dishonest conduct.
In a public statement, ASIC said the banning follows surveillance it conducted in relation to Mr Luthra’s conduct when he was an authorised representative of Westpac Banking Corporation.
“ASIC was notified of Mr Luthra’s misconduct by Westpac, and an ASIC review of Mr Luthra’s advice found that he dishonestly recast his clients’ priorities to suit his own interests,” the corporate regulator said.
ASIC stated that Mr Luthra advised his clients to switch their superannuation to a product issued by BT, part of the Westpac Group, and to obtain comprehensive personal insurance, “without taking their needs and objectives into consideration”.
“He also recommended BT insurance and superannuation products to all his clients without adequately investigating their existing financial products,” it said.
“The inappropriate advice resulted in Mr Luthra’s clients paying excessive insurance premiums that eroded their superannuation contributions at a point in their lives when they did not have enough time to rebuild their assets for retirement.”
According to ASIC, Mr Luthra prioritised his own interests over those of his clients by providing inappropriate advice that maximised the amount of fees and commissions payable to Westpac and himself.
ASIC found that Mr Luthra was not of good fame or character to provide financial services because his conduct was dishonest and deliberate, and motivated by personal enrichment. It also determined that he was not a fit and proper person to engage in credit activities.
“To be a fit and proper person to engage in credit activities, a person must act honestly, with integrity and have good judgement. Mr Luthra, however, dishonestly manipulated his clients’ aims and objectives and prioritised his own interests over theirs,” ASIC said.
ASIC commissioner Danielle Press said the failure of financial advisers to act in the best of interests of their clients, or to prioritise their clients’ interests over their own, erodes public trust in financial services professionals and affects the financial system as whole.
“ASIC expects financial advisers to uphold the values of integrity and professionalism. Conduct that results in harm to consumers will not be tolerated,” Ms Press said.
ASIC said the banning of Mr Luthra is part of its ongoing efforts to improve standards across the financial services industry.
Mr Luthra has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC’s decision.