A CBA spokesperson has confirmed to ifa that the independent member for the Melbourne suburban seat of Frankston – who was suspended and fined by the Victorian Parliament in June after being found to have misused his privileges – was previously an adviser licensed by one of the bank’s subsidiaries.
“Geoff Shaw became an authorised representative of Financial Wisdom on 8 November 2006,” the spokesperson said. “He ceased as an individual authorised representative on 8 August 2010 and as a corporate authorised representative on 1 April 2011.”
Reports in the Fairfax newspapers reveal that Mr Shaw was no stranger to controversy in his advice career either, having been suspended by the FPA for 12 months in 2009.
A spokesperson for the FPA told ifa the association does not “comment on investigations” due to its “constitution and privacy obligations”, but The Sunday Age newspaper has reported that the FPA’s Conduct Review Commission found Mr Shaw had engaged in “unlawful conduct” that reflected a “lapse in integrity” in relation to his advising a client to invest in a yacht restoration and sales business in which he had a personal stake.
In addition, the newspaper report asserts that “the Commonwealth Bank continued to employ Mr Shaw as a financial planner despite official findings exposing his misconduct”.
FOS reportedly handed down a determination against Mr Shaw during his time as a CBA-aligned adviser which ruled that Mr Shaw had “breached his duty of care and statutory obligations under the Corporations Act”.
[quote name=”FPA supporter”]Another Financial Wisdom Planner sanctioned by the FPA but allowed to continued to operate within Financial Wisdom. Will the same Financial Wisdom Planners that so strongly criticised the FPA make comment now defending the indefensible? Geoff Shaw and Rollo Sherriff both sanctioned but allowed to operate within Financial Wisdom – really?[/quote]
Who is defending them? Seriously. No one defends this sort of person. No one!
Do you think the other 360 advisers with Financial Wisdom are the same? Please do not tar everyone with the same brush. Work out the percentages…please.
Does this automatically cause them to be licensed to work in the industry? Great for bank trainees as a fill in and part timers also.
QUOTE: Conundrum 2014-07-31 11:52 The time has come for the term “financial planner” to be applied only to those who are product agnostic.
Those with product alignment could be referred to as sales rep.
“If however the client was profiled correctly…”, and that’s the big problem Peter R.
One of the questions on the most popular risk profile used “Have you ever borrowed to invest?” I mean, how is that relevant other than it helps push the clients total score higher up the risk category when they are possibly about to retire. “What’s the most aggressive investment you’ve ever made?”…another pearler. They could have bought some shares when they were 18 but now they’re 65 years old. Question no longer relevant.
These questionnaires are risky themselves. But gawwwwd if you don’t use them…look out, you’ll be labelled as a “Rogue”
“Rogue” is Vogue !!
It has been announced the media’s favourite word for 2014 is the word “Rogue”.
Congratulations on the incredible effort the media has committed to intelligent, balanced and clever reporting for the year to date.
Lets see….deadline to meet…pressure on from the Editor for a story….I know!
I will slam in a story on a “rogue” something or other……and lets make it about financial services because that’s the flavour of the last decade!
Yep, “Rogue”,like a rampaging African elephant, that will keep the Editor of my back and then its down to the pub at lunchtime on Friday with all my other “clever journo” mates!
This fallout with the CBA clients highlight the fact that advising clients is not simply about ticking a box on a cookie cutter SOA and then set and forget. This is the business model of the banks and industry funds. It is flawed. Clients invested in volatile markets need ongoing advice and support to keep on track with their strategy. If CBA cared they would not have forced Storm clients out of their growth funds at the bottom of the market by relaxing their credit limits. It is outrageous that there is continued support for ‘general advice ‘ despite all the evidence that it simply does not work.
Leo, Neil and Gerry – what an interesting discussion, re: what we see as conservative and what the public sees as conservative.
Meanwhile the US Federal Reserve has printed $4 trillion of currency since the GFC. No prizes for what that means for the value of cash and TDs (on the one hand) and the volatility of growth portfolios (on the other).
[quote name=”Neil”]If a client panics out of the market at an inappropriate time, that does not equate to poor advice on the part of the planner.[/quote]
Actually, if the client was invested in a portfolio that was not suitable for their risk profile then the planner is liable for loss. If however the client was profiled correctly and subsequently invested in an appropriate portfolio then the planner should not be liable
I didn’t mean “Conservative” in the sense of a risk profile with 10-30% in growth assets. I meant that the clients on 4 corners did not want their money to go backwards. No capital loss. Bank account or Term deposit. If a client says they are ‘conservative’ and don’t want their money to go backwards this isn’t an invitation to put them into a ‘conservative’ risk profile with 10-30% exposure to market linked investments.
Add ‘conservative’ to ‘general advice’ in the list of terms that mean different things to advisers and the general public.
Ahh yes Leo, but what does a conservative profile actually mean ? I can tell you what it doesn’t mean and that’s that you cannot make a capital loss (and that might even be over a 12 month period). If a client panics out of the market at an inappropriate time, that does not equate to poor advice on the part of the planner.
I’ve pretty much convinced myself that there is no such thing as “conservative” investing. The term should be ditched as it misleads clients into thinking they can’t lose capital and that is what leads to complaints.
Far better if you deal with outcomes and then spell out the risk of loss…enough of this conservative and balanced rubbish. Time the industry smartened up
Chris,the clients featured on the 4 corners report did not have a ‘growth profile’. They were conservative investors who told their Planner they wanted to be invested in something conservative.
I am incensed at the treatment handed out by ASIC to many of the CFP Financial Planners. Almost 100% of the losses to CFP investors were caused by unit price downturns. If the clients maintained their growth profile and time of investment, 7 years plus to now, they would all be ahead with dividends and capital appreciation. The clients are at fault by redeeming well before the recommended time line. Clients are ripping the CBA off.
WTF – are you kidding me? this is 2 of the biggest news stories of recent times rolled into one. What could be more newsworthy than allegations of cba not reacting to an fpa ruling of poor advice. a smaller delaer group would be put out of business for getting a wrist slap from fos. surely one of the executives in the bank’s advice arm must have known! dont they all sit on the fpa board for christs sake. shaw was probably a CFP!
How is this news ?
Wow the FPA in action, with lots of froth and bubble and no action.
not surprised, but it does sit well for the FPA code of conduct. Probably a different version for the CBA
Another Financial Wisdom Planner sanctioned by the FPA but allowed to continued to operate within Financial Wisdom. Will the same Financial Wisdom Planners that so strongly criticised the FPA make comment now defending the indefensible? Geoff Shaw and Rollo Sherriff both sanctioned but allowed to operate within Financial Wisdom – really?
It would appear that a much higher ethical standard is (now) required for financial planners than for politicians. We get the politicians who are most popular but at least we can choose our own financial planner.
How does one become a member of Parliament with such a record!? If he was previously engaged in ‘unlawful conduct’ he should not have been allowed anywhere near the parliament.