Duane Wright of First National Home Loans and Insurance was an authorised representative of the now defunct Suncorp-owned GuardianFP (also known as Guardian Advice) between July 2012 and April 2016, during which time ASIC said he failed to meet his obligations providing life insurance replacement advice.
ASIC found that Mr Wright failed to undertake adequate inquiries into his life insurance clients’ circumstances, failed to provide adequate replacement product advice in his SOAs, advised clients to purchase policies that were too expensive for them, and failed to consider the long-term impact life insurance policies would have on clients’ retirement savings.
Under the enforceable undertaking, Mr Wright and First National have agreed to “undergo additional training in relation to the provision of financial product advice”, and will be required to adhere to “strict supervision” for 12 months, with all advice audited by the authorising licensee before being provided to clients.
Mr Wright is currently an authorised representative of Centrepoint-owned Alliance Wealth.
Suncorp announced it would cease managing Guardian Advice in November 2015 after the business was placed under a number of licensing conditions in January, which came after an ASIC investigation uncovered deficiencies in the dealer group’s retail advice.
[quote=Gene Parmesan]For all your arrogance here – I’ve seen some great advisers who only had their DFP, and I’ve seen unscrupulous charlatans with who are degree qualified with a CFP. If you think the education standards are going to be a silver bullet then you are sorely mistaken.[/quote] Well said Gene.
That’s all very nice, anecdotally, for a social media page post. However that’s not what the whole of Industry stats say. Complaints and actions against CFP Practitioners, being 1/4 of all Advisers, are a mere fraction of the complaints and actions against the other 3/4.
Japes – that’s all well and good – but the vast majority of advisers are not CFPs, so your statistics would stand to reason. The CFP does not automatically make an adviser any better or worse – it means they spent more money on more coursework. You can easily pass the course and not subscribe to its teachings. I have seen too many advisers to mention who obviously skipped large chunks of the ethics teachings.
I have seen some really great CFPs, I have seen some CFPs who should have been driven out of the industry in the 90s, I have seen some CFPs who have asked how to calculate basic CGT equations.
You can dismiss my observations all you like – I have probably observed roughly 500-600 advisers across every state in the country over the last 15 or so years, so I have some degree of insight here much as you would like to dismiss it. And no, I don’t work for ASIC or FOS or any regulatory or observatory body if that is where your next line of attack of my views is going to come from. I am a passionate defender of the good of this industry – however if you think that a CFP automatically equals a better adviser I would encourage you to open your mind a little.
I don’t think you understand that statistic referenced there (good grief Charlie Brown). CFPs experience incidents at a low percentage. Non CFP experience incidents at a higher percentage. Maybe you might need to “open your mind a little”.
“Gene”, your experience is similar to mine. I have seen fantastic, good, average, bad, ugly ,and advice that has made my physically ill (yes, literally ill). All provided by advisers (and accountants for that matter) who have minimum qualifications through to masters/CFP/CFA and everything in between.
You wouldn’t expect basic issues to arise from someone with an industry leading designation, but sadly I have seen it before and no doubt I will see it again.
You are correct that the education standards will not be silver bullet, but hopefully a deterrent for the potential fly-by-nighters looking to make a quick buck at the expense of fair and honest advisers, what ever their qualifications.
Also worth noting Jape – the number of CFPs is roughly 5,600 and number of authorised representative as best as I could research was roughly 18,000. That is 31% holding a CFP. So that 25% of complaints being against CFP designates is close to exactly what their representation of the industry is. So essentially they are [i]just[/i] as likely to be involved in a complaint.
What do you expect from a person who only had a DFP? thank goodness for the new education standards coming in.
For all your arrogance here – I’ve seen some great advisers who only had their DFP, and I’ve seen unscrupulous charlatans with who are degree qualified with a CFP. If you think the education standards are going to be a silver bullet then you are sorely mistaken.
If you have been advising solely on a DFP and a handed out CFP for years, never trying to advance yourself then yes its going to be a good thing for the advice industry. You can honestly do a DFP in a few days and then enter the advice industry playing with peoples livelihoods. A tougher barrier to entry will help to deter those who are doing the wrong thing or aren’t giving their clients the service that is required. I have seen a lot of DFP only advisers who are great at “sales” but lack in-depth technical knowledge to properly advise a client.
and thankfully when we have to do degrees every 10 years it will definitely rule this behaviour out.
ASIC sure got good value out of Guardian. Talk about a head on a plate. I hear its also good for one of the big six
Could we please have some more details? for instance:
*What does ASIC consider to be adequate replacement policy advice – where did this case ‘miss’ the mark?
*How did ASIC determine that the premiums were ‘too expensive’ for the client?
*What was the impact on the client’s long term retirement planning?
*What super balance did the client have?
*what was the proportion of premium v contribution and or premium v fund balance?
*is there some arbitrary amount that ASIC looks for? or can a client who only has (for example) $10k in accumulated super decide that they are happy to use (for example) $2k per annum over the next 5 years to fund the insurance which they would need should something happen to them???
Once again we are given the sentence and a small amount of details, while I / we have no choice but to accept that the regulator is doing a job which is in the public interest and their judgements are fair and reasonable – additional details would go a long way to really ‘teaching’ us something from these cases…
More details please IFA / ASIC… we want to know…
If you are looking for guidance, try the ASC 413 report into life insurance. Loads of information in there with real life examples on how they are assessing advice. I wouldn’t be surprised if there is an update to this report in a few months after LIF has been in operation to see if the standard of advice has improved.
ASIC wont provide information about specific files or cases, due to privacy and the rest of the legalities. From experience, I can tell you it can take years for ASIC to collect the required information to take action/ban an adviser or put restrictions on an AFSL. They need to be thorough in this respect. Remember banned advisers have the right to appeal to the ATT and ASIC dont want it getting thrown out due to an oversight.
This is the first action taken (that I am aware of) following the Life Insurance Lapse Data Project (LILD Project). Look out for more to EUs and bannings in this space over the coming months…