The Financial Services and Credit Panel has made an order to suspend the registration of a financial adviser for three months after he used Records of Advice that relied on Statements of Advice which had been given to the clients years earlier.
A statement from the FSCP says Ian Reid’s financial adviser registration is not in force during the suspension period (from 21 November 2024) “…and he must not provide personal advice to retail clients in relation to relevant financial products.”
The panel found Reid had not complied with his obligations when providing advice to three clients. He “…used records of advice that relied on statements of advice that had been given to the clients up to seven years ago.”
The FSCP says it was “…reasonably satisfied that the further advice exemption from giving an SoA in regulation 7.7.10AE of the Corporations Regulations 2001 did not apply to two of the three clients because there had been changes in those clients’ relevant personal circumstances which were significantly different from that in relation to the previous advice.”
For all three clients, the FSCP says it was reasonably satisfied that the s961B and s961G obligations were not complied with. This was because there was not sufficient evidence on the client files:
- That reasonable enquiries were made about the client’s relevant circumstances
- That, of the enquiries that were made, the results of those enquiries were taken into consideration and advice scoped appropriately
- That the clients’ strategic advice needs were taken into consideration
- Demonstrating why the previous recommendations in the SOA remained appropriate
- That the relevant provider based all judgements in advising the client on that client’s relevant circumstances
As background the FSCP explains it makes administrative decisions on matters referred to it by ASIC that relate to the conduct of financial advisers.
The FSCP operates separately from, but alongside, ASIC’s existing administrative decision-making processes “…with the aim of responding to lower-level misconduct and ensuring that minor misconduct does not go unaddressed.”
ASIC referred Reid’s conduct to the FSCP following an ASIC review “…that examined why some superannuation members continue to invest in persistently underperforming investment options under their choice superannuation products.”
Click here to see the FSCP’s order.
