Former adviser banned for deceptive conduct with SMSF accounts
ASIC has permanently banned a former adviser after he dishonestly borrowed money from his clients’ SMSF accounts and used it for his personal expenditure.
Former financial adviser Robert Shane Michael of Bentleigh, Victoria, has been permanently banned from providing financial services after an ASIC investigation between April 2012 and September 2018 found that he had engaged in dishonest, misleading and deceptive conduct by procuring loans from four of his clients’ SMSF accounts totalling $204,000.
The loans were used for his personal expenditure which included staving off bankruptcy, paying private school fees, gambling and general expenses, ASIC said in a public statement.
From August 2009 to July 2017, Mr Michael was an authorised representative of Marigold Falconer International Pty Ltd and Allied Financial Solutions Pty Ltd through his business RM Wealth Management Pty Ltd.
The ASIC investigation also found that Mr Michael had failed to disclose commissions on financial investments that he recommended and implemented on behalf of clients, recommended financial investments without disclosing that a conflict of interest existed, and failed to prioritise his clients’ interests ahead of his own.
ASIC also found that he had failed to act in the best interest of his clients in relation to loans procured from clients and recommending high-risk investments which were contrary to clients’ risk appetites.
“Mr Michael [also] failed to provide clients with statements of advice, product disclosure statements and fee disclosure statements and engaged in unlicensed financial advice beyond the cessation of his authorisation as a financial adviser,” ASIC said.
On 26 July 2019, ASIC found that Mr Michael had breached financial services laws and was not of good fame and character.
Mr Michael has a right to lodge an application for review with the Administrative Appeals Tribunal.
ASIC said it expects financial advisers to comply with the law and adhere to ethical standards when providing financial product advice to consumers.
“Financial advisers have an obligation to provide clients with a statement of advice where one is required, before implementing the advice on their behalf. They are required to keep proper records,” it stated.
Miranda Brownlee
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.
