ASIC has banned Melbourne-based financial adviser, Ashok Sherwal, from providing financial services and performing any function in a financial services business for six years.
Sherwal advised clients in need of cash “…to replace their existing insurance and superannuation products, as well as to take out new insurance products
The regulator said in a statement that Sherwal advised clients in need of cash “…to replace their existing insurance and superannuation products, as well as to take out new insurance products, so that he could generate advice fees and insurance commissions.” It said the adviser then used some of the fees and commissions he received to make cash payments to these clients.
ASIC noted Sherwal failed to identify the scope of the advice being sought by his clients, did not obtain complete and accurate client information, or base his judgement on his clients’ relevant circumstances. It said these failures led to his clients receiving inappropriate advice that resulted in their superannuation balances being significantly eroded.
Further, ASIC said Sherwal also failed to comply with the additional disclosure requirements when providing product switching advice.
In making its decision, ASIC noted it found the adviser misunderstood what the best interests duty requires of him and demonstrated an inability to follow fundamental and proper financial advice processes:
“Sherwal prioritised his own interests above those of his clients, and he did not exercise the degree of professionalism and judgement demanded of financial advisers,” noted the regulator in its statement, adding that it also found he is not a fit and proper person due to his serious lack of professionalism and judgement.
The conduct that resulted in this banning relates to Sherwal’s activities when he was an authorised representative of Wealth & Risk Management Pty Ltd (22 July 2015 – 4 May 2016) and Dover Financial Advisers Pty Ltd (6 March – 23 October 2017).
Sherwal has appealed to the Administrative Appeals Tribunal for a review of ASIC’s decision.
