Fraudulent adviser casts shadow on industry

Last week, Australian media outlets, both mainstream and trade, reported the sentencing of Terence Nugara – a former adviser who stole $10.2 million from 38 clients in over just four years – to nine years and 11 months in jail.

While delivering the sentence, Judge Trevor Wraight characterised Nugara’s actions as “reprehensible, callous, and selfish conduct”, driven by “greed and a desire to maintain” his lavish lifestyle, which included overseas trips, race cars, boats, and various luxury items, as detailed in court documents.

A total of 18 of Nugara’s victims provided victim impact statements, with many noting the “financial devastation” he caused.

However, missing from the courtroom were representatives of the advice industry, hardworking individuals who are also victims of Nugara’s actions.

Speaking to ifa, Philippa Hunt, director at Artemis Financial Services with a major in psychology, explained that sporadic criminal activities and fraudulent behaviour by a few advisers have cast a shadow on the industry, undermining the efforts of honest professionals and the industry’s reputation.

“Sadly, it reflects on our industry with the rare and occasional criminal activity or gambling addictions that an adviser does to clients,” Ms Hunt said.

“We have gone through a long period of intense legislative changes to our businesses, education, FASEA exam, and the mental health of advisers was not good for a long time.

“Then to have yet another adviser scam clients throws a negative light on the rest of us who are honest and keep our clients safe and secure. Betrays our industry and the clients. And it does not help build a good reputation for our industry”.

Ms Hunt described Nugara as being “narcissistic in his motivations”, a person who has “no concept of personal outcomes on their own life or the mental health and life of their victims”.

“Typical of the narcissist is the victim mentality when they are caught out. And a stint being incarcerated may not make a difference to their attitude,” she said.

Turning to his victims, Ms Hunt said: “The mental and emotional health of the clients is trampled as they trusted their adviser”.

“The worst part for older clients is their retirement supports, assets and income are lost and no way to make them up again.”

Nugara’s authorisation to provide financial advice was originally suspended in March 2015 before being terminated in October 2016. In April 2023, he was permanently banned from providing financial services.

Ms Hunt also questioned why it took ASIC until 2023 to permanently ban him.

According to court documents, in most cases, Nugara convinced victims to transfer their savings or roll over monies held in their superannuation accounts to self-managed superannuation fund (SMSF) accounts he set up and had access to, in order to invest in property developments in both Melbourne and Bali.

Some of the victims were unaware that Nugara had access to their accounts when the purported investments were made.

Instead, he used the client funds to fund an extravagant lifestyle over the course of several years.

Among the victims, many held pre-existing relationships with Nugara, including one victim who he would visit at her retirement home, bringing flowers and taking her out to lunch.

“It is overwhelmingly clear from these victim impact statements that you took advantage of people who had placed their trust in you, many of whom were older and looking forward to a comfortable retirement,” Judge Wraight added.

Nugara pleaded guilty to the charges, with Judge Wraight saying that the guilty plea was taken into consideration during sentencing.