The adviser, Wayne Blazejczyk, has been banned for advice he gave while he was an authorised representative, responsible manager and director of Ballast Financial Management.
ASIC found Mr Blazejczyk had recommended that his clients set up SMSFs with low superannuation balances, exposing them to financial harm because their ongoing SMSF costs were higher than the costs of their existing super fund.
The regulator added that the adviser had failed to make reasonable enquiries to ascertain his clients’ relevant personal circumstances before giving advice, as well as neglecting to conduct a reasonable investigation into alternative products before he recommended that his clients establish SMSFs and among other things, invest in the Bateau Global Opportunities Fund.
Mr Blazejczyk is the ultimate owner and beneficiary of the SMSF administration service he recommended and the investment manager of Bateau Global Opportunities Fund. ASIC noted he had failed to prioritise his clients’ interests before his own.
ASIC said Mr Blazejczyk did not disclose his interests in entities related to him and the associated benefits and remuneration he would receive that could influence the advice he provided.
“For many retail clients with balances under $500,000, setting up an SMSF may not improve their position when compared to using an APRA-regulated superannuation fund,” ASIC said.
Mr Blazejczyk became an authorised representative of Ballast Financial in October 2003.
His banning will be recorded on the Financial Advisers Register and Banned and Disqualified Register.
Mr Blazejczyk has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC’s decision.
Too big too fail
Too much $$$ political donations
And the ASIC / Govt rort of protecting the big Institutional ADSLs continues at least until the big 4 banks have fully departed.
When you look at the dollars gouged by this guy compared to AMP and the big banks it is miniscule. This guy gets a ban which is well deserved but AMP and the big players get only fines which are picked up by the shareholders.
WHilst I agree this guy should be punished what are ASIC doing about the big $$$ being gouged by AMP and the big banks. When are the responsible managers of AMP, IOOF and the other big players going to be held to account?
I saw a client once who’s accountant set them up with a SMSF and the husband + wife combined balance was $12,000 but the annual costs to run the fund charged by the accountant was $3,400. This was a business owner and around 2010. SMSF had run for 3 years and the balance was almost gone. I saw hundreds of this type of accountant behaviour from 1997 onwards but this one was the worst example.
Dig deeper you’ll find way more than that. Not because he is deliberately dishonest or doing anything untoward but rather that is what financial planning is as a business model. It can not exist without being the purely sales industry it is UNLESS advisers simply charge an hourly rate for their advice. No $4000 soa’s, no fee for service nonsense. Hourly billable rates, nothing more. Anything else is a rort and every adviser in the country is guilty of the same.
Fee for service will be the new hunting ground for litigation. Be prepared for knocks on your door many years into retirement people.
You better stop this Fee for service BS now.
Steve – if i charged an hourly rate for all the work involved with a new client, the fee would be FAR MORE than $4,000 – i choose to package my fees so that my clients can AFFORD to get quality advice…. clearly you don’t understand this industry too well…
$4,000 sounds like a pretty fat profit margin, to be honest. What is your take home pay? Similar to a doctor or barrister but with a lower standard of care?
i only get paid $65k – so less than a teacher. I pay $26,000 a year just in software costs. trust me – there’s very little margin in that (unless you’re seeing a huge amount of clients like the banks do) so to be an independent adviser, not vertically aligned and pushing product, it’s tough.
but you love financial planning and your clients, right? that’s why you are working in financial advice. you are like a health service worker, except with no benefits, you get daily humiliation and only liabilities.
good on you mate! you aussie battler.
lol you’re such a troll… Your comments can be said about literally any industry… Why don’t we all just not do anything and only eat food to survive. Farmers are the only REAL necessity….
Financial Planning provides a REAL need and if you don’t understand that it’s fine, maybe you have received appropriate financial literacy so therefore planning doesn’t SEEM necessary. That’s not to say that the hundreds of clients that I have really have no idea how the finance world works and would rather have someone on their side explaining the risks and benefits then tackling it themselves.
No F’n clue with comments like that. We aren’t barristers and accountants, our Costs and risks are FAR GREATER. Per authorized rep the licensing costs and compliance is approx 50-75k per year, not 1500 or so to be registered with TPB or Lw society. Also, we need staff to process and administer the funds with industry and retail/wholesale platforms, and if they make a mistake guess who wears the cost and risk?! Tell me how you’d sleep at night handling 1m of transactions with staff processing and the likelihood of a bad day and an error or compliance slip up cos you have 24-48 hours from the time you see the client. Regarding the $4k fee there is approx 3k cost base right there, you can do make 50 SoA’s max per year, do the math what you make on the new client. It isn’t worth it but everything seems to that advisers are swimming in it!
that doesn’t make any sense. so huge amounts of risks to assume but no commensurate reward. how does that make any sense.
and what sort of “financial planner” is willing to accept this trade.
oh wait, financial planning is a not for profit endeavor where the adviser accepts all liabilities and no reward for the daily humiliation heaped on by all and sundry.
it’s a good job. 10 people joined the “profession” recently and 3,300 exited.
Sarah, I am confused. You say your clients can’t afford to pay an hourly rate, but you package your fees so they can afford it.
How do you determine your package fees? Surely they would be be based on an hourly rate or something similar? Don’t you work backwards and figure out what your hourly rate is based on overheads, wages, etc?
I do up front packages and renew each year. When discussing with clients I say this year we will do x,y and z, and I expect there to be 40hrs work over the year, therefore the fees are 40*my hourly rate.
What are you on about Steve?
Do you know how much time and cost it takes to provide personalised financial advice from start to finish?
Do you know all the compliance and administration that is involved?
We charge a fee for service because that is exactly what we provide. The advice is not simply the adviser telling the client to do X,Y or Z. It involves diligent and painstaking fact-finding and investigation, research, analysis, presenting the advice in a compliant document, implementing the advice, in many cases following up.
A standard case could easily take 20 hours from start to finish.
As long as the fee is not excessive, I see no problem with a fee-for-service model.
Research? You mean like the summary iRESS provides?
really? we have to read and understand every PDS we deal with, every time it changes. we have to compare modelling comparing various scenarios, we have to keep up with the constantly changing tax laws, super laws etc. Nothing to do with IRESS.
Who in their right mind would take on all the risk of managing a clients life savings for an hourly rate?We know there are a lot of Steve’s out there pushing for this but the simple response to Steve is No Thanks. Knock on someone else’s door.
So Steve, what do you estimate / suggest an appropriate hourly rate be, to cover all expenses and non-beneficial requirements? $600 ph? Are you a Lawyer? Their model seems to be sign teh client up to a hourly rate tap and keep it turned on as long as you can, irresepective of / if the clients needs the ‘water’.
I’ve seen two solicitors recently charge $8,000 to move a Joint CBA Bank account and a family home solely in the name of the deceased across to the sole surviving widow. It’s not a good comparison model.
I’ve had two lawyers try charging $10k each to cash out a clients superannuation for retirement… No advice given.
they are allowed to, it’s only financial planners who are crooks and not to be trusted, i am surprised they only charged $10k should have been $30k for such complex advice.
i know some lawyers who research for 1 hour then charge the client 10 x hours for that research and brag about it. that’s called ethics and lawyering. it’s all aok. they say value is in the eye of the beholder. people pay. full stop. just give them a cost disclosure agreement, then follow it up with another higher one, ha ha money for jam.
if you don’t like financial planning, become a lawyer, it’s easy to do. only 10 hours of cpd in nsw (watching reruns of L.A. law are also accepted) hardly any compliance, no ethics required, it’s the best. and most of all, all your mates are working at asic too.
lol, they even told the client it was a LIFE insurance policy and they were doing such a great deal for him… Honestly some days I wonder why I bother!
work at in industry fund do you? Should i get my lawyer to draw up a 50 page contract for free? Should i spend an hour a week looking at my clients funds for free? If you were a one man band working for yourself you wouldnt make such reckless comments
And this differs to many Accountants how?