David O’Brien was an authorised representative of AMP-owned Charter Financial Planning and, most recently, NAB-owned GWM Adviser Services, ASIC said in a statement.
ASIC’s review of a sample of Mr O’Brien’s advice files found that he failed to:
- make sufficient inquiries into his clients’ circumstances;
- conduct reasonable investigations into their existing financial products; and
- provide advice based on his clients’ personal circumstances.
ASIC said it found that when providing advice on superannuation, Mr O’Brien made no inquiries into matters such as costs, investment strategy, or whether his clients already had any insurance in place within their existing superannuation arrangements.
When providing insurance advice, ASIC said Mr O’Brien failed to prepare a needs analysis or objectively assess what level of insurance cover would achieve his clients’ needs.
The corporate regulator noted that one of Mr O’Brien’s clients had their cover declined for pre-existing medical conditions after their existing insurance had been cancelled, leaving them uninsured.
“Financial advisers have a legal obligation to act in the best interests of their clients when providing personal advice,” ASIC said.
“This includes taking reasonable steps to understand their clients’ personal circumstances and exploring existing financial products to ensure they are providing appropriate advice that meets their clients’ objectives.”
Mr O’Brien has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC’s decision.
Yet another FPA member according to the ASIC register. The question now is that given the FPA takes direction and receives payments from Charter and also NAB/GWM via the “un-professional partner program” what disciplinary action will the FPA impose on their member? Will FPA members call upon these firms to be fined or ask for sanctions. At $1,000 in membership the only thing you’re receiving at the moment is guilt by association.
Northern NSW adviser based 20 kilometers North of Newcastle. I see the sun still evolves around Sydney.
Always has, always will!
What was the role of AMP and NAB in all of this? If they did regular compliance checks they should have caught this early. Given it was only found out after an ASIC audit lends me to believe that AMP and/or NAB do not have the systems in place to provide financial advice. Either that or they didn’t really care as the adviser was just moving them to AMP/NAB products.
Will ASIC be cancelling their licence??
ASIC you must cancel both AMP and NAB’s AFSL. there were no clients from Dover who suffered financial harm yet they lost their license, you put 410 advisers and their families under enormous stress. while these fat cats continue to mislead and deceive you, and you willfully turn a blind eye because you know you are useless and need a job after you leave that toxic place called ASIC
you people have made financial planning the most toxic workplace with daily bullying, intimidation and humiliation. it’s the worst workplace anyone can work in.
For his next earner he might want to write a book. How about “The Bare Bummed Investor”?
As a book author he will be able to give as much product advice as he likes, without having to consider any of his readers’ personal circumstances, and without any compliance or legal constraints. All he needs is a product provider willing to give him a decent kickback to be promoted. Shouldn’t be too hard a sell. It’s a proven model now.
[i]’ASIC said found that when providing advice on superannuation, Mr O’Brien made no inquiries into matters such as costs, investment strategy, or whether his clients already had any insurance in place within their existing superannuation arrangements’.[/i][i][/i]
Sounds like every bit of Industry superfund advice without SOA’s and most accountants who set up SMSF’s for clients!
Mr O’Brien should be banned…..but this doesn’t excuse the accounting industry and Industry Superfunds.
That is the stigma many Advisers have towards industry fund advisers, however the facts don’t back it up.
A recent KPMG external audit of a high profile Brisbane based industry super fund found that their compliance standards where “significantly higher” then the industry average.
Too many advisers are afraid of industry funds and view them as a “threat”… but this is a failure to understand their own value proposition and understanding that clients engage advisers to pick a fancy complicated super fund arrangement, they pay advisers to provide strategic advice and couldn’t care less about the actual “product” being used.
I’m more then happy to leave me clients with their existing industry fund if my analysis shows the fund is meeting the clients objectives. You should be too…
I don’t doubt the small number of licensed advisers employed by Sun Super are highly compliant. Similarly for the small number of accountants who are licensed to give advice.
However the vast majority of union fund employees and accountants giving financial product advice are not licensed at all. The unlicensed mob break every rule in the book, every day of the week. But because they are not licensed they can do whatever they like. ASIC’s financial product advice focus is solely on persecuting licensed advisers.
Dumb action by the adviser to cancel existing insurance, if he actually did and the client did not simply not have the cash to pay the premium.
However at what point did the client contribute to their own dumb decision making?
Who signed the cancellation form?
There is 90 days to reinstate.
This reporting would be helpful on an industry basis only if ASIC provided the all of facts in the determination.
This was simply poor advice and poor execution. The onus is not on the client or their “dumb decision making”. The adviser recommended they change super funds and executed this advice without considering the existing insurance through that super fund. This wouldn’t require a cancellation form if the account holding the insurance was closed as a result of a rollover. I also have no idea how you get a 90 day reinstatement in there somewhere?
correct correct correct. However you can usually always re-instate insurances within 90 days. We’ve had multiple superfunds do full close downs of clients accounts and usual issues, the protecting your super laws cancelling policies and been able to re-instate the policies as long as it’s within the 90 days.
And no know mendical conditions.
Many clients aren’t financially savvy – it is why they pay fees to Advisers to do the job for them! Responsibility is on Advisers to do their jobs, not on clients to double check the Adviser is doing what they’ve been paid to do.
Do you put your car up on a hoist after you pick it up from the mechanic to inspect the mechanic’s work to make sure they did their job??? It’s the same thing
you should. all mechanics are rip off merchants, in comparison to only some Advisers 🙂
I don’t get how this guy made it through his annual audits under NAB. They look for this type of stuff in their audits…. Was it just a one off and ASIC slammed the Adviser? Sounds a bit strange because on the face of it, the Adviser has done the wrong thing, but where do NAB sit in this with their oversight of one of their advisers? And/or have ASIC been overzealous?
Maybe NAB and AMP were happy with him moving clients from their existing arrangements into their own products. As with everything, it is usually a case of follow the money.
Idiot. How are people like this still in the industry
the failure here is really ASICs. Why did they turn insurance brokers into financial advisers? Do mortgage brokers have to do an assessment on what value house a client should buy? No, clients choose that and the broker/bank tells them what their limit to borrow is. FP should be able to let clients choose what insurance amounts they want, and of course advise them if there is any great concern with their choose, e.g Underinsurance, affordability etc. The mandatory Needs analysis is lame and advisers struggle with this simple task.
I don’t think mortgage brokers will be able to continue any further the way things are going. They will be next.
That’s a pretty lazy attitude Bear… A client is paying you, the so called professional, to provide advice!
If all they wanted was for you to execute the level of cover they have requested, they would go to a product provider directly! They are engaging an adviser to be provided with ADVICE!
Attitudes like you make me worry that our industry is incapable of change…
Its not lazy at all. It realistic. They ‘made’ insurance salesman into ‘professionals’ against their will. Sure if they ask the Adviser to tell me how much they need, go for it. i care figure that out myself and dont want someone telling me how much, as many do. Really, in the end you get as much as you can afford, just like a mortgage…Not having a Needs analysis is not a reason to ban someone, and here’s a tip for you Anon – that would have been a big reason why this person got banned…
By the way, the Insurance broker can still help with types of cover and terms..Going to Insurance direct wont help you with that. And you cant go to major insurers direct either. You wouldnt be so smug if ASIC targeted you, they WOULD find problems 100%. they always find problems. Recently, they banned someone for moving from AMP super (not because the new super wasnt cheaper ) but because they said he did it just to justify charging Ongoing Service Fees! so there you go..goodluck
yet the ATO can consolidate super accounts with impunity ! how does that work?
GPH – Let’s not get started on ‘Intra-Fund’ advice…
…and cancel insurance if they haven’t made a payment to super for 16 months, but thats OK because its legal??!