A financial adviser who has banned by ASIC for five years after failing to act in the best interest of clients has asked for the decision to be reviewed by the Administrative Appeals Tribunal (AAT).
The regulator announced that it banned Travis Byron McLean of the Gold Coast, Queensland after it found he had also failed to comply with several financial services laws, stating these related to life insurance advice.
Commenting on the banning ASIC Deputy Chair Peter Kell said, “The business model of simply ‘selling’ life insurance without complying with the legal and regulatory obligations will not be tolerated by ASIC. Advisers who fail to give compliant advice will be removed from the industry.”
“The business model of simply ‘selling’ life insurance without complying with the legal and regulatory obligations will not be tolerated…”
ASIC examined a number of McLean’s client files from the time he was an authorised representative of Millennium3 Financial Services (3 July 2006 to 31 December 2014) and Total Financial Solutions Australia (TFSA) (20 February 2015 to 31 July 2017).
Specifically, ASIC found that McLean had failed to:
- provide sufficient detail in Statements of Advice to enable his clients to make informed decisions about his advice;
- keep proper records;
- 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
- conduct a reasonable investigation into financial products that might achieve the objectives of the clients.
It all seems condemnatory but this is only on paper. Maybe we aren’t getting the full picture here.
Perhaps he didn’t allow sufficient time for those important matters. As it stands, as advisers we now have only 20% of our time available to contact, make appointments with, and actually sit down with clients to assess their needs. These activities are the only ones which generate income. Eighty percent of our time now is taken up with duties Travis is being taken to task with. The balance is very much tilted against us.
“The business model of simply ‘selling’ life insurance without complying with the legal and regulatory obligations will not be tolerated by ASIC…. Funny, isn’t that what every direct insurance provider does – legally? And industry funds can ‘recommend’ members increase their cover at any time – legally? Oh, I should have kept reading. Of course, it only matters if an adviser is involved. Stuff the public if they get their insurance elsewhere!
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