Adviser banned for 5 years for misleading super advice

The banning follows an ASIC surveillance, which found that Mr Chan sent misleading and deceptive emails about superannuation to some clients in 2016. ASIC found that, in doing so, Mr Chan contravened section 1041H of the Corporations Act.

“ASIC’s review of Mr Chan’s emails found that he advised clients to opt out of MySuper, claiming that the MySuper product had higher fees than the fee on their existing superannuation balances,” ASIC stated.

“However, this information was not correct for every client. Subsequent to Mr Chan sending the emails to clients, some members did not fully transition to MySuper and continued paying higher fees as a result.

“In providing this advice, ASIC found that Mr Chan failed to identify each client’s objectives, financial situation and needs, and base all judgements on each client’s relevant circumstances.”

The regulator said it also found that Mr Chan prioritised his company receiving commissions over the interests of his clients. During the initial course of ASIC’s enquiries in 2017 and 2018, Mr Chan had failed to disclose the emails to his licensee or to ASIC. 

“ASIC considers that Mr Chan was not adequately trained or competent to provide financial services, and that he was likely to contravene a financial services law in the future,” the regulator said.

“Financial advisers must not engage in misleading conduct in connection with financial products or services. Financial advisers must also prioritise their clients’ interests when providing personal advice. ASIC may ban an adviser if they lack the necessary competence to provide financial services.”

Mr Chan has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC’s decision.

Mr Chan’s banning has been recorded on the Financial Advisers Register and the Banned and Disqualified Persons Register. 

Under the government’s Stronger Super reforms, a member’s accrued default amounts of superannuation were to be transferred to a MySuper fund by 1 July 2017, unless a member opted out of the transfer. 

An accrued default amount is the amount of a member’s superannuation interests where the member has not given the fund trustee any direction about the investment option to be applied, or that is invested in the fund’s default investment option. MySuper products are intended to be simpler and have lower fees and costs.

Mr Chan was an authorised representative of Australian Unity Personal Financial Services Limited between 15 July 2016 and 4 April 2019 and Infocus Securities Australia Pty Ltd between 5 April 2019 and 1 September 2020.