- Adviser Banned over Record Keeping;
- ASIC Cancels Four Licenses;
- Perception of Advice Profession Falls;
- AFA Launches Excellence in Education Award
Adviser Banned over Record Keeping
The Australian Securities and Investments Commission has banned a former financial adviser who was not adequately trained or competent to provide a financial service.
Atish Prasad, an adviser from Westmead, Sydney, has been banned from providing financial services for a period of three years.
ASIC found that Mr Prasad was not appropriately trained, and that he also failed to maintain adequate records of his advice, did not provide adequate or timely Statements of Advice to his clients, and did not provide appropriate replacement product advice.
At the time of the misconduct, Mr Prasad was an authorised representative of Lionsgate Financial Group. In 2013, ASIC imposed additional license conditions on Lionsgate, due to concerns that it was not complying with its general obligations as a licensee.
ASIC Deputy Chairman, Peter Kell, said the case highlighted the importance of record keeping by advisers.
“Financial advisers must keep accurate and up to date records detailing a client’s circumstances and the advice given. These records provide an explanation to the client as to why the advice was provided. They are also integral to enabling the licensee to comply with its obligations to ensure that its representatives provide advice that is in the best interests of the client,” Mr Kell said.
ASIC Cancels Four Licenses
In a separate action, ASIC has cancelled four AFS licenses and suspended one for failing to lodge an audited annual profit and loss statement.
The cancellations and suspension follow a proactive review of the conduct of 14 licensees that had failed to lodge their audited annual statements.
The licensees are: Ken Hart Insurance Brokers, McDouall Stuart Corporate Finance, Marshall Lawrence, Green Stride Investment Management and Navigate Funds Management.
Deputy Chairman, Peter Kell said: “In our experience, a licensee’s failure to comply with reporting obligations can indicate a poor compliance culture.”
“After our last review, ASIC warned licensees that their failure to lodge audited annual statements may result in the cancellation or suspension of their AFS licences and we are disappointed that some licensees do not seem to be heeding this message.”
Perception of Advice Profession Falls
The public perception of the honesty and ethical standards of financial planners has fallen over the last twelve months, according to the latest survey from Roy Morgan.
The annual Image of Professions Survey ranks a range of professionals based on the public’s rating of their honesty and ethical standards. Financial planners ranked 17 out of the list of 30 professions, with just 24% of people giving them a ‘very high’ or ‘high’ rating.
The result is down 4% on 2014’s result of 28%, which was the highest ranking the profession has achieved since it was added to the survey in 2009.
Financial planners ranked behind accountants (position 11), bank managers (14) and lawyers (15), but ahead of newspaper journalists (19), advertising people (29) and car salesmen (30). Insurance brokers were ranked a low 27th position, with just 11% giving them a ‘very high’ or ‘high’ rating.
Gary Morgan said: “Roy Morgan’s annual Image of Professions survey for 2015 shows a majority of professions (17) recorded falls in their ratings for ‘ethics and honesty’ over the past year…
“The biggest losers this year were Bank Managers 34% (down 9%), Accountants 45% (down 7%) – their lowest rating for over a decade since 2002 and Lawyers 31% (down 7%). Another big loser was Financial Planners 24% (down 4%) – now at their lowest ever rating for very high or high ‘ethics and honesty’ following a series of scandals in the industry.”
AFA Launches Excellence in Education Award
The Association of Financial Advisers is now calling for nominations for its 2015 Excellence in Education Award.
The Award, sponsored since inception by Asteron Life, recognises advisers who are continually investing in further education for themselves and their staff to connect knowledge with improving value to clients and business performance.
General Manager, Member Services & Campus AFA, Nick Hakes, said the Award promotes advisers who are the very essence of professionalism.
“Professionalism is a combination of knowledge, attitude, behaviours and accountability, as well as a commitment to life-long learning. We are delighted that Asteron Life is also committed to showcasing those who encapsulate adviser professionalism,” Mr Hakes said.
Asteron Life Executive Manager, Mark Vilo, said Asteron Life was proud to support, encourage and celebrate professionalism in the financial advice profession.
“We’ve long been passionate about excellence in education and the role it plays to help drive a positive consumer perception of the advice profession. It’s vital to recognise and reward the talented advisers who invest in their professional development and the incredible job they do to help Australians make better decisions for their financial future,” Mr Vilo said.
The winner of the AFA’s Excellence in Education Award will be announced at the AFA National Adviser Conference in Cairns in October 2015. Nominations for the Award close on 29 May 2015. Click here for more information or to nominate.
