Adviser banned over breach of BID

ASIC has announced that it has banned Northern NSW-based financial adviser David O’Brien from providing financial services for a period of four years, after finding the adviser failed to meet his best interests duty obligations to his clients.

Mr O’Brien was an authorised representative of AMP-owned Charter Financial Planning Ltd and, most recently, NAB-owned GWM Adviser Services Ltd.

An investigation into the adviser by ASIC reportedly 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.

Specifically, the investigation by ASIC found that the adviser was providing his clients with advice on superannuation without making inquiries into costs, investment strategy, or whether his clients already had insurance in place within their existing superannuation arrangements.

Further, when providing insurance advice, the adviser was alleged to have failed to prepare a needs analysis or objectively assess the level of insurance cover that would achieve his clients’ needs.

The regulator also highlighted that one of the adviser’s clients had their cover declined for pre-existing medical conditions after their existing insurance had been cancelled, leaving them uninsured.

As such, ASIC has banned Mr O’Brien from providing financial services for four years, and his ban will be recorded on ASIC's publicly available Financial Advisers Register and the Banned and Disqualified Persons Register.

Mr O’Brien has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC’s decision.

ASIC reiterated that financial advisers have a legal obligation to act in the best interests of their clients when providing them with financial advice, which requires advisers to take reasonable steps to understand their clients’ personal circumstances and ensure product recommendations are appropriate for their clients’ objectives.

Mortgage brokers are set to be held to a similar legal obligation, with the legislation outlining the implementation of best interests duty obligations for mortgage brokers now tabled in Parliament.

The investigation into the banned adviser was undertaken by ASIC’s Wealth Management Major Financial Institutions Portfolio as part of ASIC’s ongoing efforts to improve standards across the financial services industry.

As part of these efforts, ASIC has so far banned 64 advisers and three directors in the financial services industry for failure to meet best interests duty or other obligations.

Five of these cases are the current subject of an appeal.

[Related: Westpac fined for licensee’s breach of BID]