ASIC Bans Adviser For Poor Risk Advice

ASIC has banned a Victorian adviser for three years after surveillance gathered through its Life Insurance Lapse Data Project found he failed to act in the best interest of his clients.

The regulator banned Gurumukh Singh Mehra of Doveton, Victoria after it found he failed to:

• make reasonable enquiries into his clients’ relevant circumstances, such as obtaining existing superannuation and insurance information;
• adequately investigate the clients’ existing financial products prior to making insurance recommendations;
• compare the features and costs of any existing insurance with that recommended to clients; and
• base all judgments on the clients’ relevant circumstances.

ASIC also found Mehra, who was most recently an authorised representative of Spectrum Wealth Advisers, was not competent, or adequately trained, to provide financial services.

The ban will be recorded on ASIC’s Financial Adviser Register, and Mehra has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC’s decision.

ASIC Appeals Sentence of Queensland Adviser

In other ASIC news, the regulator has successfully appealed the sentence of a former Queensland financial adviser who was banned by the regulator but did not receive any conviction when facing court.

The regulator and the Commonwealth Director of Public Prosecutions (CDPP) made the appeal against the sentence of Ricky David Gillespie, who was formerly a senior financial planner with Commonwealth Financial Planning.

In November 2012, ASIC permanently banned Gillespie from providing any financial services after he was found to have forged client signatures; created false file notes, charged excessive fees, and provided advice to a client that was not appropriate in the circumstances.

ASIC also took the matter to court and on 12 December 2017 Gillespie was fined $3,000 with no conviction recorded after pleading guilty to a rolled-up charge of forgery (see: Former CBA Adviser Pleads Guilty to Forgery).

The CDPP appealed against the sentence on the basis that it was manifestly inadequate, in particular the decision not to record a conviction, and received a judgment in their favour on 20 September 2018 ordering that a conviction be recorded against Gillespie.

The ruling noted the documents forged were protective in nature, both in terms of the CBA bank and the clients, and when confronted by CBA staff that he had committed forgery, Gillespie denied doing so and continued to commit acts of forgery until April 2009.