ASIC found Adrian John Cassidy acted dishonestly by concealing recommendations he gave to 54 clients in 2017 from his licensee, Godfrey Pembroke.
Godfrey Pembroke was at the time a wholly owned subsidiary of National Australia Bank.
Mr Cassidy recommended that his clients invest in the start-up company Bux Global Limited, which ultimately went bankrupt despite raising over $65 million from investors. Liquidators were appointed in October 2018.
ASIC found that in making these recommendations Mr Cassidy failed to act in his clients’ best interests and provided them with a statement of advice regarding Bux. ASIC found Mr Cassidy’s conduct had significant consequences for his clients and his licensee and he failed to consider those consequences when he recommended clients to invest in Bux.
Mr Cassidy’s conduct was reported to ASIC by NAB.
He makes serious revenue out of the deal, screws over all the clients and walks away with a ban. Boo hoo! What do you have to do to get jail time. Clients get taken for a ride and promised the world, he gets a slap on the wrist but gets to keep all the money he makes. I hope NAB come after every cent this costs them. What a crook and not an ethical bone in his body. But, now with no licence that does not matter and nor does he have to sit the ethics exam to prove his lack of understanding. What a narcissist! Once a crook always a crook. Question how did he sell this deal to people to get them to buy in? Abuse of trust?
In no way defending this guys actions. But what you’re suggesting does NOT work for a second. If they bring in the ability to prosecute based on loss then we would ALL be screwed no matter what advice is provided in a market downturn…
He can only be done on the appropriateness of the advice. I mean what would happen if the clients made a million dollars each? He didn’t steal anything and there has to be a benefit of the doubt here that he was hoping the start up would take off.
Anon please that is ridiculous this is not a typical advisor recommending investments to his client if it was then why did he hide it from his licenscee.
Of course all investments carry risk but startups are highly risky and only a small percentage of your portfolio should be allocated to those investments, this adviser did not do this because if he did his clients would have only suffered small loses and his license wouldn’t have reported it to ASIC and then ASIC wouldn’t have banned him.
I agree advisors shouldn’t be penalised for making investment losses but this case is totally different. The advisor did not prudently diversify his clients investment portfolio and he tried to hide this fact from his license.
So yes the advisor has engaged in illegal behaviour by not acting in the best interest of clients by diversifying their investments
And by hiding this from the licensee so that he can get away with it. Yea I think advisers that engage in this illegal behaviour need jail time not just banning and fines.
I am an advisor myself and the only way we can change the horrible reputation we have is by calling out the bad behaviour of other advisors not trying to defend it Anon.
You literally just explained exactly what I said in a long way?…
Easy answer….greed.
You can generally get 6-10% placement fee on these speculative unlisted investments. 54 clients at say 100K each would generate upto 500K in commission. Would buy your wife a nice handbag! But its fraud, pure and simple and should be treated accordingly. I also agree with the comments that the Godfrey Pembroke operatives that recruit these advisers to get generous bonuses for hitting recruitment KPI’s and then turn a blind eye to poor behaviour should also be held to account
You will never stop “rogue” financial planners, the same as you can never stop “rogue” solicitors running off with the trust funds. Big difference, the Law Society has a fidelity fund to compensate clients affected by dishonest solicitors. Why not the same sort of scheme for the finance industry, a levy fund to compensate for the bad, then prosecute the perpetrators to the full extent of the law by striking off the financial planner for life.
That is a brilliant idea and far more effective than more pieces of paper we have to study for that will mean nothing anyway.
Licensed financial advisers have compulsory PI insurance and compulsory External Dispute Resolution Scheme membership. These provide greater consumer protection than the Law Society fidelity fund.
If an adviser loses their licence those consumer protections cease. However they could still continue providing dodgy financial advice in an unlicensed capacity as an accountant, real estate agent, super fund employee, or book author.
Don’t get me wrong, I’m not suggesting this guy should be let off. But when we have a system where licensed financial advice providers are stringently regulated, but unlicensed providers are given a free pass, it herds naïve consumers and dodgy advisers into the unlicensed world. A recipe for disaster.
Although this was entirely wrong and unacceptable on every conceivable level, if he had a degree qualification and passed the FASEA exam with 100%, it would not have stopped his desire to recommend this strategy or to generate fees through such an investment.
This is because ethical and moral behaviour come from within the individual’s make up….it is a part of the blueprint.
It’s the same with empathy and concern for others well being.
Irrespective of any qualification level, there will always be some who put themselves in front of others.
And the education providers provide no useful or practical education anyway – it’s all purely theoretical and most doesn’t apply in the real world. Learning on the job provides a much better outcome for everyone involved. You wouldn’t be happy with a university qualified carpenter with pieces of paper but little-to-no hands on experience building your house, so why would you be happy a paper-educated Adviser building your wealth?
That’s fine except for the fact that most of the Advisers banned have minimal qualifications- which is simply an objective fact. Go have a look at the qualifications for the person mentioned in the article on the Financial Adviser Register. I agree it’s not just all about academic credentials, any reasonable person would agree, but what we are seeing is very poor results for those who have not spent the time and effort to become properly qualified.
Yes, agreed. I don’t think an Ethics course/FASEA exam stops this stuff, however, having to knuckle down and do further study does sort those who are serious about doing the right thing from those in the industry for a quick buck.
Qualifications don’t mean anything if they don’t teach anything though. You can have all the pieces of paper in the world related to Financial Planning and still not be able to advise or be terrible at it if you do. Just look at some of the rubbish put out by those in charge of Financial Services studies at the universities. They have the academic theory but nothing else. Similarly to high school Economics and Accounting studies.
Fair enough. Many people might suggest they do learn something from study and otherwise it is about the professional commitment to have achieved the qualifications – like many other professions such as Medicine or Law. Certainly many academics don’t get it and theory is only a guide. Certainly, I learnt to be an Adviser after doing the qualifications possibly the same way one learns to be a Solicitor after LLB.
AMP who I will acknowledge are not a bastion of integrity and ethics despite most of their senior management being very well qualified apparently found little difference in the numbers of advisers who caused issues when split between degree and non degree qualified (ie) they had similar percentages that caused issues in each category and qualifications were not an individual differentiator.
Actually, most of the senior people at AMP are woefully under qualified for their role. Also that research outcome for AMP you have stated is contrary to the industry experience where complaints and incidents are far more prevalent for the Advisers with weaker qualifications.
6% commission and then he charged the clients a 6% fee
one sentence says it all “Mr Cassidy’s conduct was reported to ASIC by NAB.” -where we ASIC before this ?????
So we don’t have a bear regime and senior management can act unethically and are not responsible
IFA perhaps an article on where are they now Post royal commission for some senior managers who were incriminated in the RC
I think you would be SHOCKED
Brenner – now on the Board of The George Institute for Global Health
Whereat – now GM Advice at IOOF
Perkovic – still EGM at CBA
…and so on
Feels like there would have been high level approvals, high level meaning management, why don’t we see action across the layers of responsibility and accountability?
Once again. The only fault this guy made was being a licensed adviser. Everyone is way way way better off just calling themselves a Financial Coach and giving unlicensed advice on whatever they wish. Either that or work directly for a bank where you are untouchable.
never understand why a guy who can convince 54 clients into a speccy stock doesn’t just recommend something legit and charge them accordingly. He is either really not that sharp, and a cowboy or he got something more out of the deal from the company for promoting it.
GF are feral on audits. Where they looking the other way. How come his management are still there
Notice on the ASIC register this guy has only done the basic 4 diploma subjects to become a Financial Adviser, seems to be a theme here lately. How anyone was ever allowed to do so little study and provide advice on people’s life savings as a qualified professional is beyond me.
No matter how much education he did or didn’t have wouldn’t have changed the outcome – he’d have done the exact same thing. Formal education from the universities and colleges doesn’t provide anything useful and practical anyway – it’s all purely theoretical and learning on the job is much more powerful.
That may be true re education, but now at least the barriers to entry make it harder for unethical individuals to get into financial planning. Where previously you could do 4 subjects like ol’ mate and be fleecing clients within weeks, at least now it takes years. Not many looking for a quick buck at someone else’s expense will bother to wait so long.
It will be harder to gain entry, though I’d guarantee this will simply mean that the next round of scandals to come from the industry will be larger as a result as the unethical ones won’t waste their time on a few dollars here and there. Instead a few will pull off massive ponzi schemes or straight embezzlement/fraud.
A wise man once said that in looking for people to hire, you look for three qualities – integrity, intelligence, and energy. If you don’t have the first, the other two will kill you……..Has nothing to do with his educational standards at all, that’s a ridiculous assumption – I’m qualified and experienced and I’ll tell you one thing when the poop hits the hits the fan it’s experience that gets your clients through it, not a piece of paper you got 15 years ago.
The company raised $65M. (1) How much of this came from this bloke? (2) How much from others? (3) Most importantly — has anything happened to anyone else who was involved in raising the money. Also the bloke got what he deserved so I’m not supporting him just sick of inconsistency.
And what has ASIC done about the $65 million lost in Bux? Probably nothing. ASIC & the ASX are as useless as each other when they let Directors do as they please. Scams and dodgy practices are all to common in the small cap space within the ASX.
What a dropkick! got 100% what you deserve, want to act like a cowboy, go be a stockbroker, all that is still legal there.