Adviser permanently banned for misuse of client SMSFs
A Queensland-based financial adviser has been permanently banned by the corporate regulator after it was found he recommended his clients to allow their SMSFs to lend money to his related entities against their best interests.
The behaviour was a major factor behind ASIC’s banning of William John Henry Houwing (known as Jack Houwing), of Esk, from providing financial services as well as cancelling his AFSL, Financial Options Pty Ltd (Financial Options), of which he was a director and authorised representative.
ASIC said it found that between 31 August 2006 and 15 May 2019, Mr Houwing arranged for his clients to lend money to his related entities, including:
- Belbrooke Pty Ltd as trustee for the Belbrooke Administration Trust
- Belbrooke Pty Ltd as trustee for the Belbrooke Mortgage Trust
- Ochkit Pty Ltd as trustee for the Houwing Family Trust
Further, the corporate regulator found that Mr Houwing:
- Failed to act in the best interests of his clients by recommending that they allow their self-managed superannuation funds (SMSF) to lend money to his related entities, particularly in circumstances where he failed to recommend that they obtain their own independent advice.
- Arranged loans from clients for his own use, and in some cases, benefited when he failed to repay the loans on time.
- Had a conflict of interest as both a financial adviser and the recipient of the loans, and failed to prioritise the interests of his clients over his own interests.
- Is not adequately trained or competent to provide financial services.
- Is not of good fame or character.
The cancellation of Financial Options’ AFSL follows the suspension of the licence on 26 August 2019, following concerns from ASIC that Financial Options was not meeting its licence obligations.
In cancelling the AFSL, ASIC also said it found that Financial Options had not complied with its financial requirements and had not done all things necessary to address its concerns in relation to organisational competence, human resources and compliance requirements.
“The failure of financial advisers to act in the best of interests of their clients, or to prioritise their clients’ interests over their own, not only harms their clients but also erodes public trust in the financial system,” said ASIC commissioner Danielle Press.
“ASIC expects financial advisers to uphold the values of integrity and professionalism.”
ASIC said Mr Houwing and Financial Options have the right to seek a review of its decision from the Administrative Appeals Tribunal.
Adrian Flores
Adrian Flores is the deputy editor of SMSF Adviser. Before that, he was the features editor for ifa (Independent Financial Adviser), InvestorDaily, Risk Adviser, Fintech Business and Adviser Innovation.
You can email Adrian at [email protected].
