Former Synchron Adviser Hit With EU

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The Australian Securities and Investments Commission (ASIC) has accepted an enforceable undertaking (EU) from a former authorised representative of Synchronised Business Service Pty Ltd (Synchron), effectively removing him from the financial services sector for three years.

Michael Melamed, who was an adviser with Synchron from February 2013 to March 2015 accepted the EU after an ASIC review of his advice during the period of March 2013 to January 2015.

ASIC stated during that period Melamed’s advice about life insurance did not meet the standards required of a financial adviser and he had failed to comply with financial services laws.

In particular, the regulator stated Melamed had failed to maintain accurate records relating to the provision of advice and failed to make reasonable inquiries into his clients’ relevant objectives, financial situation and needs.

ASIC also stated he failed to conduct a needs analysis to determine if the level of insurance cover was in his clients’ best interests and had recommended insurance cover where clients were unable to afford the insurance premiums.

He had also failed to demonstrate the ability, professional skills and knowledge required to competently provide financial services, according to ASIC, with the EU requiring Melamed to undergo further training in the event he returns to providing financial advice.

Melamed ceased being an authorised representative of Synchron in March 2015 before moving to Inteprac Financial Planning from March 2015 to March 2016 at which time he ceased offering advice according to the ASIC Financial Advice Register, which now also records his exclusion from the industry.

Synchron Director, Don Trapnell, told riskinfo Melamed left Synchron of his own accord, following its reluctance to allow Melamed to adopt a business model that was inconsistent with the standards imposed by Synchron’s compliance requirements. Riskinfo understands this business model included an online advice process or methodology.

ASIC’s review of Melamed was part of the regulator’s wider review of life insurance advice with Melamed acknowledging that ASIC’s concerns about his advice are reasonably held and that he would not provide financial services on behalf of himself or any other person, for a period of three years.

ASIC Bans Permanently Bans Sherwin FP Founder…. 

In other regulator related news, ASIC has permanently banned the founder of Sherwin Financial Planners and charged a former Commonwealth Financial Planning (CommFP) adviser with forgery.

ASIC had already banned Bradley Thomas Sherwin, the former chair of collapsed lender Wickham Securities and founder of Sherwin Financial Planners from providing financial services for two years and seven months in September 2013 but has now permanently banned Sherwin.

Prior to the change to a permanent ban Sherwin was allowed to make a submission against the move with ASIC stating Sherwin had chosen not to make a submission.

Sherwin’s ban follows an appearance in the Brisbane Magistrates Court on 25 June 2015 when Sherwin was charged with 33 counts of dishonestly causing detriment totalling nearly $10 million between May 2009 and December 2012 and one count of dishonestly breaching his duties as a director of Wickham Securities Limited between November 2009 and October 2010.

…and Charges Formers CommFP Adviser With Forgery

ASIC’s action against the former CommFP adviser relate to the alleged forgery of 31 documents by Ricky David Gillespie, of the Gold Coast, and follow his permanent banning from providing any financial services in 2012.

Gillespie appeared in the Southport Magistrates Court recently on one charge related to the documents with ASIC alleging that between 1 January 2007 and 13 June 2009, Gillespie forged the signatures of clients on documents including applications for financial products and a series of internal CommFP documents.

ASIC alleges that the purpose of the forgeries was to meet the requirements of the Commonwealth Bank’s internal audit process.

At the time of ASIC’s allegation Gillespie was an authorised representative of CommFP and held the role of Senior Financial Planner at the Broadbeach Commonwealth Bank branch on the Gold Coast

The case, which is being prosecuted by the Commonwealth Director of Public Prosecutions, was adjourned for further mention on 4 July 2016.