The expelled adviser, Gregory Forster, was a representative of ANZ-owned Millenium3 from 2014 to 2018 and Breakaway Finance Group from 2012 to 2014.
The regulator said the action was part of its Wealth Management Project, which is focusing on the conduct of Australia’s largest financial advice licensees – NAB, Westpac, CBA, ANZ, Macquarie and AMP.
ASIC said Mr Forster had failed to take into account his clients’ actual circumstances when providing advice and recommending new superannuation and insurance products, instead obtaining limited information and making assumptions about their personal circumstances.
ASIC said Mr Forster recommended insurance in many cases where the premiums were unaffordable.
“Even though the premiums were paid out of his clients’ superannuation, sometimes they were significantly more than his clients’ normal superannuation contributions, potentially leading to erosion of the clients’ superannuation balance,” ASIC said.
“ASIC found that Mr Forster had made those recommendations even though the clients had originally sought his advice because they were unhappy with their superannuation balance.”
Mr Forster was said to significantly understate the costs associated with implementation of his advice, particularly costs associated with running a self-managed super fund (SMSF).
In some other cases, ASIC also found that Mr Forster had not complied with the requirements for a statement of advice (SOA) – instead of disclosing the dollar value of fees, he had described fees in percentage terms.
Mr Forster’s banning will be recorded on the Financial Advisers Register and on the Banned and Disqualified Persons Register.
In 2017, ASIC entered into an enforceable undertaking with Mr Forster’s former licensee, Breakaway Finance, which required Breakaway to cancel its AFSL.
As part of its Wealth Management Project, ASIC has banned 53 advisers and one director from the financial services industry.
Five bannings are the subject of appeals.
If you want to see bad advice on Risk and erosion of account balances, there is a particular fund in the coal industry in Queensland where I found clients paying more than the SGC going into the fund. I’m talking $16,000 a year. Not an isolated case
[quote=Anon]Well, interestingly enough, I have just failed an audit as a trail commission was under disclosed by $40 FOR THE YEAR! It was a high risk fail! The product, premium and price were all acceptable by the client, and yet, based on the RULES, I am a high risk as an Adviser, despite many years and many successful claims. This once great industry is fast going down the gurgler thanks to shiny arsed beauracrats, lawyers and auditors that have never sat in an oncology ward and helped a client with a trauma claim (Auditor: why that amount of trauma cover?), never been to a funeral of a clients child (Auditor: why the full amount of child cover?)[/quote][quote=Anon]Well, interestingly enough, I have just failed an audit as a trail commission was under disclosed by $40 FOR THE YEAR! It was a high risk fail! The product, premium and price were all acceptable by the client, and yet, based on the RULES, I am a high risk as an Adviser, despite many years and many successful claims. This once great industry is fast going down the gurgler thanks to shiny arsed beauracrats, lawyers and auditors that have never sat in an oncology ward and helped a client with a trauma claim (Auditor: why that amount of trauma cover?), never been to a funeral of a clients child (Auditor: why the full amount of child cover?)[/quote]
I’m curious is this a fail from your licensee or ASIC? If it’s your licensee then you’ve got a good licensee on your hand, send out a record of advice to the client re-disclose and you can’t ever be pulled up by ASIC for clients being unaware. If ASIC have failed you then that IS a joke, if it’s not consequential to the advice then it shouldn’t brand you as anything other than human for accidentally putting down the wrong price…
Well, interestingly enough, I have just failed an audit as a trail commission was under disclosed by $40 FOR THE YEAR! It was a high risk fail! The product, premium and price were all acceptable by the client, and yet, based on the RULES, I am a high risk as an Adviser, despite many years and many successful claims. This once great industry is fast going down the gurgler thanks to shiny arsed beauracrats, lawyers and auditors that have never sat in an oncology ward and helped a client with a trauma claim (Auditor: why that amount of trauma cover?), never been to a funeral of a clients child (Auditor: why the full amount of child cover?)
“The regulator said the action was part of its Wealth Management Project, which is focusing on the conduct of Australia’s largest financial advice licensees – NAB, Westpac, CBA, ANZ, Macquarie and AMP.”
If you search for gold in Bendigo – you just might find it – but you’re not going to find it in Albury – because you are only looking in Bendigo,
ASIC’s Wealth Management Project is fundamentally flawed because it restricts their vision. ASIC’s view is we hit the Big 6 and we cover 70% of the industry – that’s gotta be good.
Problem is it has skewed their perspective. The assumption within the media, policticians and now much of the public is that Banks are bad – others are good. A proper analysis can quickly disprove this.
Now we have an Industry where the 5 of the BIG 6 are bailing or have bailed from retail financial advice. No-one yet knows the full impact of this – but real changes are already happening and they all point to decreased supply and increased costs. Yet most of the industry has rolled over because it’s fashionable to bash the banks.
Time to WAKE UP
Queensland advisers get banned by ASIC 50x more than any other State! Queensland cowboys lol.
Lol, payback for leaving M3…. dob him in to the regulator.
[quote=Anonymous]It’s called personal responsibility – in ASIC-speak, being a gwown-up. [/quote]
Wow, victim blaming much?
If the premiums were unaffordable, how did anyone pay them? By ASIC’s logic, only people with spare cash should buy insurance. Even though people without spare cash need it most. People adjust their spending when they have to. It’s called personal responsibility – in ASIC-speak, being a gwown-up.
“Potentially leading to erosion of his super balance.” Yes. But if he had bought insurance outside super, that would have led to erosion of his non-super assets. And insurance is cheaper if you buy it through super. So the erosion in super is less than the erosion outside of super. And if you are trying to buy a home, you really need money outside of super.
It’s called financial [i]planning[/i][i][/i].
If he over-insured, have a go at him for that. But banning someone for minimising the price just proves your ignorance.
Agree with Anon no action against the licensee
Wasn’t this the same licensee and executives that were slated in the RC
Yet ASIC do NOTHING
IFA perhaps a post RC where are they now exercise to show bad culture at the top does pay
Is ASIC aware of the law?
Question One
“….sometimes they were significantly more than his clients’ NORMAL superannuation contributions….”
Does this mean any recommendation of insurance where the premium is larger than NORMAL super contributions is a no go? MASSIVE IMPLICATION FOR EVERYONE.
Question Two
“ASIC found that Mr Forster had made those recommendations even though the clients had originally sought his advice because they were unhappy with their superannuation balance.”
So, when a client walks in, is ASIC now saying do no further investigation of the clients needs.
MASSIVE for BID.
Ahhh the old ‘rollover your super and load it up with insurance premiums’ one size fits all ‘advice’ model.
You know what really 5hits me about articles like this, If he didn’t recommend the insurance cover and then they needed to claim – then he’d probably be sued for that to (i.e. for not addressing their insurance needs).
It’s all F@#@#@ed. It’s quite clear their aim is to eradicate us all as an industry of self employed advisers. these bludgers only know how to draw a taxpayer funded pay. How the hell did we allow this to get to this??
One word–Citigroup.
Slap on the wrist.
Planner –kicked out.
Licensee –no comment of action against them
This industry is in tatters for self employed planners…but isn’t that the goal all along
ASIC are corrupt – they ban planners over this trifle and yet let multimillion dollar fiascos in the banks and particularly the ISA – the letter without ever investigating fees ripped out and paid to unions for no real member value.
Get real ASIC or get the f*ck out our pool