On Friday, ASIC announced it had permanently banned Robert Hutchison of Western Australia for dishonestly banking cheques he received from his clients for advice fees directly into his personal bank account, when he knew he was obliged to remit or report them to his licensee, ANZ-aligned RI Advice.
The misconduct occurred between January 2011 and November 2012 when Mr Hutchison was licensed by RI Advice. ASIC’s adviser register shows Mr Hutchison later joined Neo Financial Solutions until 2015, and then Infocus until early last week.
Infocus Wealth Management said it “promptly revoked” Mr Hutchison’s authority to provide advice after being notified of his banning.
Infocus managing director and chief executive Rod Bristow said the group was unaware of Mr Hutchison’s past behaviour, despite having conducted a due diligence process.
“As an organisation, Infocus stands for quality advice for Australians from all walks of life. At no stage do we condone any adviser’s conduct that is not in the best interests of clients,” Mr Bristow said in a statement to ifa.
“Our adviser due diligence process is thorough. Prior to any adviser joining the Infocus group, we ask a series of questions of the adviser and engage with their previous licensee to understand why the adviser is changing AFSLs.
“Unfortunately, we were not made aware of any details relating to this particular issue.
“In addition to acting swiftly to revoke Mr Hutchison’s authority to provide advice, we are actively working with the clients of Mr Hutchison’s business to ensure a smooth transition to a new adviser.”
In a statement to ifa, an RI Advice spokesperson said the dealer group had suspended Mr Hutchinson on 31 July 2012 and launched an investigation after noticing “irregularities with his work”.
“The investigation identified the extent of Mr Hutchinson’s misconduct and how many of his clients were affected. Investigators interviewed staff at the RI Subiaco office as well as Mr Hutchinson, and reviewed client files,” the spokesperson said.
“After completing the investigation, RI repaid fees to about 45 clients who were overcharged or charged twice. RI then terminated Mr Hutchinson’s authorisation to provide advice on 3 September 2013.
“RI has since implemented additional monitoring and supervision initiatives to prevent, identify and address conduct of this kind.”
RI Advice did not answer ifa’s question as to whether it had notified Neo Financial Solutions or Infocus Wealth Management in regard to the investigation.
In March 2017, ASIC flagged the need for better reference-checking processes as a way to prevent rogue advisers from circling the industry.
I just got my refund cheque.. I didn’t even know that infocus was my advisor. The group I used years ago must have changed names… lol… Off to the bank I go
I focus did their process as well as can be expected. The problem obviously les with RI and Neo “if” they didn’t pass on info to reference checks or maybe with ASIC if they did not advise parties of a problem.
This FP industry needs to stop this backstabbing and witch hunting every time a single rogue adviser does something wrong. You just sound like a little Dudley do right donning prat when you carry on like that.
The thieving bad egg was found, reported and clients refunded. He has been banned and will never work again. Enough said. The process eventually worked.
Now everyone just wants to have the own little Q&A shining moment by probing into why and how etc etc etc. BORING! It just screams insecurity and a bad case of proving you are holier than the next person.
Get over it. Move on. Leave Infocus alone & stop creating this persona of our industry has a problem, it was a bad individual and he got caught. Next thing you know FP’s will have to forceably do pointless study to prove their worth……….oh oh. Too late.
Good to see NEO has had more issues with there “Very stringent” recruiting! after last years issues you need to consider how good they are… seems to be a questionable group as they seem to get a few of these bad apples… and they wonder why they are under a EU for compliance issues!
Hi All
Thanks for your comments.
Infocus is obviously very disappointed that one of the advisers licensed through the Infocus Group has been banned for actions he undertook some time ago while with a former bank-owned licensee. We take our position in the industry and diligent approach to risk and compliance very seriously, as all of our advisers can attest. This extends to our new adviser recruitment process, where we undertake comprehensive background checks that include speaking with former licensees of anyone proposing to join the Infocus Group. In this particular case, no party we talked to, including the adviser, former licensees, or ASIC identified any information relating to this matter.
Nonetheless, Infocus accepts we need to do more to ensure that the actions of one adviser do not impact others within the Group. We have initiated a fresh review of our recruitment and onboarding process specifically focussed on how we ensure the factual accuracy of the information that is disclosed in that process to ensure that this situation doesn’t happen again.
Regards
Rod Bristow
Managing Director and CEO
Infocus
Hi Rod, Thanks for clarifying that you made the enquiries and received no relevant information. That’s profoundly disappointing on a number of levels. I can understand that ASIC can’t comment but the Australian Standard on Reference checking was built by a group that included Bank and FSC (IFSA) representatives. How will the new ABA process be any better?
Hi Sean
It’s a great question and one the industry needs to face up to. A core question for me is, what sort of industry behaviours are we rewarding and recognising and how is this shaping our industry?
Infocus has adopted the new ABA standard as it effectively captures our existing reference-checking process. This is an important and more formalised building block that is required. I think over time as enforcement of the FoFA regulations , new education standards and a single EDR body take effect, the standard of the industry will undoubtedly improve. Cultures take time to change and that’s what we’re talking about in an industry context.
I’ve said many times that in facing into industry change, success will be defined by those who can adapt to that change. This requires hard decisions to be made in the long-term interests of not just the business you might be working for, but the industry as a whole.
As a group Infocus have taken the hard decisions early around adapting to changing regulations and actively work in partnership with our advisers around effectively managing the associated risks. This might have meant we have grown less quickly that some of our peers in the last few years, but we (and our advisers who know how hard we work to ensure their businesses are compliant with new regulations) are comfortable that this growth is sustainable for the long term.
Cheers
Rod
So Rod can you categorically state none of this activity occurred while at Infovus?
Absolutely.
When FoFA was first introduced in 2013, we re-engineered our software (Platformplus) to enable a workflow-driven service delivery framework that includes real-time monitoring and supervision of advice and client engagement across the group. The sophisticated nature of the software, in concert with our AFSL audit, monitoring and supervision framework and risk and compliance oversight, gives me comfort these issues have not taken place ‘on our watch’ from a licensee perspective.
Cheers
Rod
The new ABA protocol might assist with some of the bad apples moving dealers, but my understanding is it only applies to organisations who have signed up to it. If you are with a licensee who isn’t a signatory to the new ABA be very careful who applies to join your group. These bad apples will take the path of least scrutiny
it really does open a can of worms into the on boarding process of both NEO and in focus yet we see ASIC doing nothing about dealer groups that are clearly taking on advisers without completing due diligence
Can of worms is right. One should be able to assume that both RI and NEO had flagged this guy with ASIC. But then again assuming any thing in this industry is akin to stupidity. If they didn’t, they are severely negligent. If they did, and ASIC’s system doesn’t record and flag breaches so that and licensee applying to appoint him are made aware of any breach or open investigation the ASIC is negligent.
But regardless, one really needs to know what InFocus did or didn’t do regards reference checking and duel diligence.
This isn’t a comedy of errors it’s a case study on how far this industry still has go. It’s not just about weeding out poor advisers it’s about weeding out poor licensees – too many of both hide behind a smoke screen image of false greatness.
What about Neo? They were the licensee the AR moved to straight after RI. What is their onboarding process like?
Infocus claim to have a thorough adviser due diligence process. Did RIAdvice fail to provide true and accurate answers to the reference checks or did Infocus either not make the enquiries or ignore the result? I’d certainly like to know because despite ASIC’s intentions, processes won’t stop rogues if Licensees don’t follow the suggested processes.
So ANZ/RI did not press fraud charges??
Cleary OutofFocus on this one!