January 9, 2018
Two financial advisers working for the same advice group, but based in different states, have agreed to enforceable undertakings after ASIC found they provided inappropriate advice about switching life insurance products.
The regulator accepted the EUs from the directors of PAC Financial, Christopher John Cannon and Danny Charles Pianta, who were both also authorised representatives of Austplan.
Under the conditions of the EU, advice provided by the Victorian based Cannon and Brisbane based Pianta will be overseen by an independent expert for three years.
The acceptance of the EU’s by ASIC follow concerns by the regulator that financial advice related to insurance products, and provided by both advisers during the period of June 2015 to August 2016, failed to comply with financial services laws.
Specifically, ASIC was concerned the two advisers failed to act in the best interest of clients in relation to personal advice and advised clients to switch insurance products when it was not appropriate.
ASIC was also concerned that Cannon and Pianta, in some instances, failed to consider all costs, risks, benefits and disadvantages when advising clients to switch from an existing insurance product into a recommended new insurance policy; and used generic Statement of Advice templates when making product recommendations to clients.
Both advisers acknowledged that ASIC’s concerns about their advice were reasonably held and ASIC recognised the cooperation of the advisers during its investigation.
SA Adviser Permanently Banned
ASIC has also permanently banned a South Australian adviser from providing financial services after he instructed clients to pay fees to him directly, instead of via his licensee.
ASIC banned David Mario Alafaci, of Morphett Vale, South Australia, who was an authorised representative and employee of Centra Wealth from 2 July 2014 to 11 January 2016 and an authorised representative of Interprac Financial Planning from 12 January 2016 to 16 December 2016.
ASIC found that during his time with Centra, Alafaci misled clients about his authority to issue invoices and instructed them to pay fees directly into his personal bank account, contrary to his contractual agreement with Centra.
As a result of this, he received a financial benefit, acted in his own self-interest at the expense of his licensee, and misled Centra and caused it to suffer a financial loss.
Alafaci’s banning will be recorded on ASIC’s Financial Advisers Register, and he has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC’s decision.