ASIC has banned a Queensland life insurance adviser from providing financial services for a period of five years for failing to act in the best interests of his clients, including failing to ensure whether recommended insurances were appropriate and affordable.
The corporate regulator said it had banned Christopher James Young following an investigation stemming from concerns raised by his licensee, Affinia Financial Advisers, about Young’s advice on insurance and superannuation products.
Young was formerly an authorised representative of Affinia from 12 June 2013 to 23 July 2015, after which ASIC reviewed a number of his client files relating to advice provided during that time.
ASIC found that Young had failed to:
- provide sufficient detail in Statements of Advice to enable his clients to make informed decisions about his advice;
- keep proper records; and in some instances, he had created false or misleading client file notes;
- make reasonable enquires into clients’ relevant objectives, financial situation and needs;
- determine if the amounts of insurance cover he recommended were appropriate and if premiums were affordable and payment could be maintained by clients;
- conduct a reasonable investigation into financial products that might achieve the objectives of the clients;
- provide the required information about his remuneration and other relevant interests when providing financial product advice; and
- demonstrate the ability, professional skills and knowledge required to competently provide financial services.
ASIC stated that after Young had ceased as a representative of Affinia in July 2015 the licensee had reviewed all advice provided by Young and then implemented a remediation program for affected clients.
In related news, ASIC has also permanently banned another Queensland adviser for misleading and deceptive conduct which resulted in client funds being invested in unsecured fixed interest notes in the adviser’s licensee.
ASIC took the action against George Karakatsanis, of Yeronga, Queensland, who was an authorised representative of Protect Ensure Pty Ltd from 16 July 2012 to 22 May 2014.
The AFSL of Protect Ensure was cancelled by ASIC on 15 December 2014 before it was placed into liquidation on 12 June 2015.
ASIC found that during that period Karakatsanis engaged in false and misleading conduct by making false statements about features of financial products and misled clients so they did not understand the basic features of the financial products he was recommending.
The corporate regulator also found he failed to disclose that investor funds were being invested in Protect Ensure and thus constituting a direct conflict of interest, which he did not disclose nor did he consider clients circumstances, objectives, financial situations and needs when recommending they invest in Protect Ensure.
ASIC said because of these actions he failed to act in his clients’ best interests as well as when he failed to give provide appropriate advice to provide Statements of Advice.
ASIC determined Karakatsanis was not of good fame and character, making him an unsuitable person to provide financial services, however, he has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC’s decision.
