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Queensland Adviser Accepts EU For Best Interests Failure

A Queensland financial adviser has agreed to cease providing financial services for five years after ASIC found he failed to consider the best interests of clients while providing life insurance advice.

ASIC stated it had accepted an enforceable undertaking (EU) from Dean Scott Hartmann, of Toowoomba, Queensland, after surveillance raised concerns about his advice to clients.

Under the EU, Hartmann will be unable to provide financial services for at least five years and will be required to follow supervision requirements if he re-enters the industry.

These requirements include having each piece of advice audited by his licensee for a period of six months and recording and implementing any changes requested by the licensee.

Hartmann was an authorised representative of Hart Ensole Pty Ltd from 1 August 2012 to 30 June 2017 and following a review of client files provided by the company, ASIC found he:

  • failed to act in the best interests of clients when recommending a switch from an existing insurance arrangement into alternative products
  • failed to make reasonable inquiries into clients’ relevant objective, financial situation and needs
  • failed to conduct reasonable investigations into clients’ objectives for insurance requirements or insurance products that could satisfy clients’ objective
  • advised clients to switch insurance arrangements and superannuation funds when it was not appropriate to do

ASIC also acknowledged Hartmann’s cooperation with the regulator during its investigation.

  • Rick

    The only mistake he made was to provide PERSONAL ADVICE.

    The super funds, insurers and banks all do exactly this hundreds of times a day. They actively consolidate super accounts, recommend investment strategies and cancel and replace insurances all without knowing the client, or acting in the best interests of the client.

    Why would anyone continue to provide full advice to B, C and D clients when the big end of town is protected by ASIC and can act with impunity in the best interests of no one other than their share holders.

    It is disgusting and bordering on fraudulent that ASIC penalise this adviser for following the sales strategies of all the major players. Why cant advisers, banks, super funds and insurers all be held accountable to the same set of rules and all be forced to act in the clients best interests when dealing with any financial product.

    • Phil

      A 5 year EU is not about making the mistake of providing Personal Advice. To even imply this insults our industry. It is about a bad apple churning business – the very reason we now have all these extra layers of reporting and compliance.

      • Rick

        I realise that there are bad apples out there and have seen many cases of poor advice which is against the best interests of clients.

        I also acknowledge that Dean probably should have been banned for not acting in the clients best interests and have no problem with the penalty.

        I was just saying that if he had followed the sales tactics used by the direct to public sales teams of the banks, insurers and super funds then the result would have been the same or worst for the client, no one would have been banned and Dean could go on providing poor advice under the guise of general advice to more people who ASIC believe have time and are educated and interested enough to understand the wording and terminology in an insurance contract.

        How can you think its is equitable for advisers to have to spend hours on paperwork and compliance whilst being forced to act in the best interest, when less qualified and less experienced sales people can sell the exact same products without the compliance burden, BID or the threat to their advice licence?

        Why couldn’t they have just banned the 50 or so advisers who churn and be done with this whole LIF mess, which benefits consumers in NO WAY. LIF was never actually about churning. As we all know.

        Why would anyone ever want to do a 4 year university degree to advise on insurances when you can do a week long training course and sell the same policies to the detriment of clients.

    • BKY

      Hi Rick,
      The way I see it is that Audit Takers are now on witch hunts in an effort to fulfill quotas…ASIC need some evidence to back up their claims that churning is in deed a problem…but wait-a-minute is churning a problem? I can’t tell anymore!!!…Mr Hartman was probably doing the wrong thing (but maybe he thought he WAS acting in the client’s best interest but simply couldn’t prove that he was)…if we had the file we may even be able to conclude that his files and filenotes didn’t contain evidence to support meeting the “Safe Harbour” provisions and therefore the result is that he has been judged as not acting in the best interest of the client…Every Risk Adviser should be quaking in their boots right now because this is only the beginning…welcome to the land of “Best Interest”…

  • Ken

    The way I see it this legislation has become so convoluted that despite your best endeavours to do the right thing you could be easily caught out on some area you were sure you had covered
    No excuses for those caught as it takes a good investigation to come up with a guilty verdict
    Provided it is extensive and all facts are taken into account including everyone is human !!
    This legislation is a bit like the universe , it expands than contracts falling back on its self just make sure you not in the way when it does
    File notes and accurate record keeping is your only defence with this If it’s not in writing and signed off on you will be guilty until proven innocent