Adviser hit with permanent ban for SMSF misconduct
The corporate regulator has permanently banned an adviser for recommending the establishment of SMSFs for clients despite it being contrary to their best interests and inappropriate to their circumstances.
ASIC has permanently banned former Spectrum Wealth Advisers authorised representative Jane Elizabeth Myers of Dunlop, ACT, from providing financial services.
This follows a surveillance of Ms Myers when she was with the dealer group between October 2013 and March 2017.
Ms Myers claimed that she was only facilitating the establishment of SMSFs for her clients, rather than providing financial product advice.
However, ASIC said its surveillance found that Ms Myers gave her clients financial product advice recommending they establish SMSFs and roll over their existing superannuation into SMSFs.
In doing so, she did not act in her clients’ best interests or provide advice that was appropriate to their circumstance, ASIC said.
Specifically, the corporate regulator found that Ms Myers failed to:
- identify her clients’ relevant circumstances;
- investigate whether the SMSF would achieve the clients’ financial objectives beyond their desire to purchase property;
- reasonably inform her clients of all associated costs of holding a property within an SMSF; and
- provide her clients with statements of advice.
In one instance, ASIC noted that Ms Myers advised her client to roll over existing life insurance to the newly established SMSF.
As a result, the client lost life insurance cover and subsequently the client’s spouse did not receive the insurance payout.
ASIC also found that Ms Myers was not adequately trained or competent to provide financial services and that she is likely to contravene a financial services law in the future. Further, it said her conduct demonstrated serious incompetence and irresponsibility.
“ASIC expects financial advisers to understand and comply with their obligations under the law. When providing personal advice, advisers are required to act in the best interests of their clients, not simply implement their clients’ instructions,” the corporate regulator said.
“Setting up an SMSF is a significant financial step for consumers and impacts their retirement savings. Advisers must take their clients’ personal circumstances and objectives into account before making recommendations or assisting clients with the establishment of SMSFs.”
NSW adviser banned for 3 years
In addition, ASIC announced that it has banned New South Wales-based financial adviser Alexander Bruce Thomas from providing financial services for three years.
Mr Thomas was an authorised representative of National Australia Bank Limited between June 2008 and March 2017, and of Forsyths Financial Services Pty Ltd between September 2017 and October 2019.
ASIC said it found that Mr Thomas failed to comply with financial services laws, including failing to provide advice that was in the best interests of his clients.
It said its review of a sample of Mr Thomas’ advice files showed that he failed to make reasonable inquiries into, and base all judgements on, his client’s relevant circumstances, and to appropriately scope the advice.
“Financial advisers must act in the best interests of their clients when providing personal advice. This includes taking reasonable steps to understand their clients’ personal circumstances and exploring existing financial products to ensure they are providing appropriate advice that meets their clients’ objectives,” ASIC said.