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5-year ban handed down for inappropriate LRBA advice
The corporate regulator has banned a Hunter Valley-based financial adviser for five years for not appropriately assessing whether limited recourse borrowing arrangements were suitable for his clients.
ASIC’s ban of Sean Philip Lewis followed a surveillance of his advice while he was an authorised representative of Spectrum Wealth Advisers from December 2013 to June 2018.
The regulator found that the NSW-based adviser advised most of his clients to use an LRBA to fund the purchase of real property through an SMSF, and also gave insurance advice to all clients.
When providing this advice, ASIC said Mr Lewis did not professionally and independently assess whether using an SMSF and borrowed funds to invest in property was an appropriate strategy for each of his clients.
The corporate regulator also noted that Mr Lewis did not adequately investigate or offer any alternative investment strategies that may have provided greater diversification of risks.
“Mr Lewis failed to comply with financial services laws, including by failing to provide advice that was in the best interests of his clients and failing to provide advice that was appropriate for his clients’ objectives,” ASIC said.
“When providing insurance advice, Mr Lewis prioritised his own interests over that of his clients. He provided insurance advice that would generate large commissions for himself, regardless of whether the recommended products were appropriate for his clients.”
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 adrian.flores@momentummedia.com.au.
The clients were referred to me by a broker who had been approached by the clients. The clients stated that their specific goal was to setup an SMSF and to buy a property through it as they were dissatisfied with the performance of their existing Industry funds. ASIC commented that although the client specified that their goal was to setup an SMSF and buy a property it couldn't be seen as a goal as ASIC stated it was an outcome not a goal?? I still believe that a Goal can be to setup and SMSF and buy a property as that was their goal!0- Financial planner and not a mortgage broker0
- Financial planner first or mortgage broker first hard to tell when you do both Don't know of a financial planner who doesn't look to refinance every loan as part of the plan ?0
- If the clients did exactly the same thing but without an adviser everything would be deemed ok I guess0
- I'm sure the advice he recommended also had nothing to do with him being a mortgage broker.0
- I wonder how many of these clients would have come to him for advice on how to invest in property using there super in the first instance. Advisers generally target this kind of area to provide specific advise.0
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