ASIC has banned a Perth financial adviser from providing financial services for five years following a surveillance of his advice.
Peter Jianchao Xu was an authorised representative of Westpac Banking Corporation, Commonwealth Financial Planning Limited and, most recently, Neo Financial Solutions.
ASIC reviewed a sample of Mr Xu’s advice files and found that he had failed to comply with financial services laws including the best interests duty and the requirement to provide appropriate advice.
ASIC found that Mr Xu repeatedly recommended clients take out a new insurance policy instead of exploring whether it would be beneficial if they remained with or modified their existing policies.
ASIC also found an ongoing failure by Mr Xu to consider his clients’ personal circumstances when providing personal insurance advice. As a result, Mr Xu’s recommendations are likely to have exposed his clients to the risk of being under-insured.
When providing personal advice, financial advisers must take their clients’ personal circumstances into account and adequately consider any existing financial products as well as new products before making product-switching recommendations.
The banning of Mr Xu is part of ASIC’s ongoing efforts to improve standards across the financial services industry. It will be recorded on ASIC's publicly available Financial Advisers Register and the Banned and Disqualified Persons Register.
Mr Xu has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC’s decision.
The banning of Mr Xu falls within ASIC's Wealth Management Major Financial Institutions Portfolio. The portfolio focuses on the financial services conduct of Australia's largest financial institutions (NAB, Westpac, CBA, ANZ, Macquarie and AMP) with respect to credit and retail lending, financial advice, fees for no service, superannuation trustees, insurance, unfair contract terms and other licensee obligations, and other conduct arising from the financial services royal commission.
As part of its Wealth Management Portfolio, ASIC has banned 62 advisers and three directors from the financial services industry. Four bannings are the subject of appeal.
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