SMSF adviser convicted for breaching banning order
A former financial adviser has been convicted after providing advice on establishing an SMSF despite his banning order.
In a public statement, ASIC has reported that former Queensland financial adviser Lawrence Toledo has been convicted and fined $1,500 after pleading guilty to three charges of breaching an ASIC banning order.
In 2017, Mr Toledo was banned from providing financial services for seven years after ASIC found he had failed to act in the best interests of his clients when advising them to establish a self-managed superannuation fund (SMSF) to purchase properties.
Despite his ban remaining in force until 5 September 2024, Mr Toledo continued to provide financial product advice and deal in financial products, ASIC said.
According to ASIC, Mr Toledo breached his banning order in a number of ways including the provision of financial advice to a SMSF to invest in Premier Realty Group Pty Ltd.
He also arranged the sale of 70,000 shares in Premier Realty Group for $70,000 to the SMSF and arranging a second sale of 14,000 additional shares in Premier Realty Group costing $14,000 to the same SMSF.
Mr Toledo entered his plea and was sentenced in the Brisbane Magistrate’s Court.
The matter was prosecuted by the Commonwealth Director of Public Prosecutions after a referral of a brief of evidence from ASIC.
Mr Toledo was banned from providing financial services for seven years in September 2017.
ASIC found that he had failed to properly identify what it was that his clients wanted advice on, and to reasonably investigate what financial products would best suit their needs.
The Corporate Regulator also claimed that he had failed to understand what was required of him to comply with the best interests duty and provide advice that was appropriate to the clients.
ASIC's surveillance of Mr Toledo looked at a number of his client files from Sentinel Private Wealth Pty Ltd (Sentinel), where he has been an authorised representative since March 2014.
Commenting on the banning order in 2017, ASIC Deputy Chairman Peter Kell said that financial advisers have a clear duty to act in their clients' best interests.
“In some cases, advice to establish an SMSF for the sole purpose of purchasing a property may not be in a client's best interests, particularly where the SMSF borrows funds to enable the purchase,” Mr Kell said previously.
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.