ASIC announced today that it has banned Stephen Michael Beckton, a financial adviser and former authorised representative of non-aligned licensee Sentinel Private Wealth Pty Ltd, from providing financial services for five years.
An ASIC review of Mr Beckton’s advice found that he had recommended clients change superannuation and insurance products in circumstances where there was little benefit, but significant cost, to the client.
This advice benefited Mr Beckton through increased adviser fees and commissions he received from insurers, ASIC said.
Mr Beckton was found to have: failed to act in the best interests of his clients; failed to provide appropriate advice to his clients; failed to accurately disclose the fees associated with his advice; and failed to put the interests of his clients ahead of his own, when he knew that there was a conflict of interest, ASIC said.
ASIC deputy chair Peter Kell said, “Financial advisers must put their clients’ interests ahead of their own. Super switching that provides little benefit to the client but is very profitable to advisers is clearly unacceptable.”
Mr Beckton was a representative of Sentinel Private Wealth from September 2013 to October 2016.
Mr Beckton has a right to appeal to the Administrative Appeals Tribunal for a review of ASIC’s decision.
Prior to ASIC being formed the Gov of the time, made significant changes and it was born out of it’s predecessor. If Malcolm was half the national leader he would like to think he is, such a significant measure is well and truly overdue. ASIC is past it’s use by date.
The article does not give any detail but what if we are replacing a cheap (but inferior) Group Insurance product in Super with a better (but more expensive) Retail Insurance product let’s say also in Super. The benefit not being dollars but better claim definitions, guarantee of renewal, policy ownership, claims experience history. Hopefully that is not what ASIC’s saying here?
Jeez, that’s going to put the wind up a few advisers in vertically integrated models. What’s the definition of “significant cost”? There’s such a grey area around at what point switch and consolidation action delivers a financial, benefit to a client. There are some iconic vertically integrated operators who have run provider supported analysis and switch support to get monies into their platform that if ASIC asked the right questions of them there would be more than one adviser facing similar actions. I guess that seeing that this guy is with a smallish licensee the old question has been answered – size does matter.