In a statement issued on Thursday, ASIC confirmed that it found Nathan Smith had failed to provide “appropriate” financial advice and in the best interests of his clients.
ASIC found Mr Smith did not consider his clients’ existing products when making recommendations to switch, did not align recommended investment strategies with client risk profiles, failed to properly disclose costs and significant consequences of switching products in advice documents, did not provide clients with fee disclosure statements within the 60-day statutory time frame and failed to provide compliant renewal notices in relation to ongoing fee arrangements.
Mr Smith’s banning has been recorded on ASIC’s Financial Advisers Register and the Banned and Disqualified Persons Register.
He has the right to appeal to the Administrative Appeals Tribunal for a review of the decision.
This guy’s investment knowledge and performance over years was second to none. His standards and ethics shown to clients also – they were always the most important thought in his mind and a lot of clients (existing and future/potential) are going to be a lot worse off given his loss to the industry. Not to mention the snowball effect now that every adviser who’s been taught, mentored or tried to emulate his methods will now be second-guessing themselves at every decision they need to make for their clients. All to the benefit of industry and retail funds though I suppose which is what the regulators want at the end of the day – no one innovating; no one actually caring; no one making a difference. Why outperform (and consistently so) when you can instead have the industry funds and bank-owned fund managers matching (or underperforming) the markets, raping the clients’ balances for fees (which are the *real* fees for no service), and have the donations coming into political parties’ coffers instead just the way they want it. Bravo ASIC and your political-masters – you’ve royally screwed the industry AND the clients you supposedly exist to protect this time.
FASEA exams, (“relevant”) university degrees, professional years, 100 cpd points a year, ethics courses, etc won’t improve the good advice, service, skills, knowledge and abilities existing advisers have and provide already….and they won’t stop ASIC or their KPIs from trying to ban good people. Not until the government call a royal commission or audit into the regulator, their powers and their people. Once they realise the gestapo and anti-adviser types of behaviours that are rampant in its corridors and actually do something about professionalising the entire department (a nifty idea I know – ensuring those supposedly trying to police professional standards and conduct are themselves professional, ethical, knowledgable and experienced FIRST) by replacing the majority of their “analysts” and “delegates” (ie with people with the right skills and abilities for the jobs instead of career public servants), I’m sure the government would be simply amazed at how dramatically the figures change almost overnight – bans will decline dramatically; misconduct allegations will almost disappear; EUs won’t just be used for the big end of town to escape actual punishment for wrongdoing; and affordable advice will reappear in the market place for consumers. Not only that, but the only ones being punished will be the ACTUAL criminals who deserve it. Until then, the entire industry to an outsider and consumer will remain a ridiculously bad joke that’s uncompetitive in the global market.
In other words, he did nothing different to what an industry fund does when they coerce new members to join or the inion funds when they get the union officials to mandate that a jobsite has to use a certain union super fund and union officials ‘help’ employees to fill in paperwork to roll over benefits from other funds?
Though from what’s been seen in this instance, there was no coercion, nothing untoward, everything in the clients’ best interests, no financial gain/benefit to the adviser, and no detriment to the clients. You’d be amazed at how a regulator can pad a case and make a mountain out of flat earth.
If the endorsement below is accurate, then I suspect this would be a “dob-in” from an industry fund who lost a client. Remember this could also be a result of a “staff stuff up” , BUT the adviser wears it, as we all do. Looks like Mr Longo’ spear-carriers got their head on a pole for the month
Interesting – I once made a FoI request to the regulator following their exact guidelines and assuming they’d provide the requested documents within the 28 days they stated they were required to. 45 days later after numerous emails, phone calls and eventually hassling by my lawyer, they finally came back with SOME of the documents requested, but most of those were completely blacked out any way. Should they be banned for not complying with 28 day obligation? Those who hold us accountable should themselves be accountable.
I used to work with this guy – he was probably the most ethical professional I’ve had the good fortune to work with. His strategies were solid; always putting the client’s interests far before his or the company’s; level of technical knowledge was off the charts; and his clients the happiest and most loyal you could dream of having. If ASIC think this is bad advice, our industry is doomed as are clients’ financial futures. If they’ve decided to ban someone like Mr Smith, NO ADVISER IN THE COUNTRY IS SAFE.
They like the low hanging fruit.
[quote=Anonymous]yep, as it should be! [/quote] but are you making money in a very compliant environment?
You know ASIC is under the gun when the press releases come out daily about banning advisers. Don’t worry about affordability of advice or excessive red tape just keep banning advisers. Interesting how they never go after the senior managers at the big end of town or the continual breaches from the union funds who have done far worse than Mr Smith. But great job ASIC you banned another adviser.
Good point, it is well known within advice circles of 2 very high profile ex major Bank execs that were key architects of the appalling culture that brought on the RC and came under the RC spotlight (promoting churning in-house from
legacy to new product all in the name of FUM sales, encouraging FFNS and discouraging annual reviews (“what? you review clients??? hell no – you’re job is strictly new business sales, just stick to hitting your mile high monthly FUM target and we might just decide to keep you on”) destroying files etc, jumped ship to another wealth AFSL and got off scot free, with a handy $7fig. golden ex-gratia ‘bury everything, say nothing’ payout. As of today, these 2 have had zero consequences, zero investigation, zero penalties and as of today, are still on the receiving end of million dollar bonuses. Great work ASIC.
Who – names?
There are no shortcuts anymore, and once the new breach reporting obligations come in, your advice is on show for the whole world. Its not just about giving great advice, you have to be great at documenting it.
yep, as it should be!
All the while, the cost of providing advice continues to rise putting it beyond the reach of those who need it most……brilliant!
Agreed. But how would you explain am adviser being banned if they’d had had every single piece of advice, document and file prevetted prior to delivering to clients; AND the clients have all benefited?