One-size-fits-all advice leads to license cancellation, bannings
A financial planning firm which the Australian Securities and Investments Commission (ASIC) said was providing one-size-fits-all advice has been had its licensed cancelled.
As well, two financial advisers connected to the firm, United Wealth Group of Tweed Heads on the Gold coast, have been banned for five and seven years.
ASIC said it had cancelled the AFSL of United Wealth Group because it found that “the operation of a one size fits all advice model and the use of generic reasons to support personal advice recommendations meant United Wealth Group failed to ensure its financial services were provided efficiently, honestly and fairly”.
“ASIC found that United Wealth Group were issuing misleading SOAs by incorrectly disclosing administration fees payable by clients, failing to disclose the licensee’s association with a product provider and not properly disclosing the risks of a specific product recommendation,” the regulator’s statement said.
ASIC also found United Wealth Group failed to take reasonable steps to ensure its authorised representatives complied with financial services laws.
Under the terms of the cancellation, United Wealth Group’s licence will remain in effect for 12 months solely for the purposes of maintaining its membership of the Australian Financial Complaints Authority and its obligation to hold professional indemnity insurance cover.
In a separate announcement ASIC said it had banned James Furnell and Adrian Summers for seven and five years respectively. Furnell was a director and authorised representative of United Wealth Group Pty Ltd Summers is the director, and was an authorised representative and responsible manager, of United Wealth Group.
The ban prevents Furnell from providing any financial services, performing any function involved in the carrying on of a financial services business and controlling an entity that carries on a financial services business.
ASIC found Furnell failed to act in his clients’ best interests by failing to conduct reasonable investigations of products that might meet his clients’ needs. He failed to provide appropriate advice and engaged in misleading or deceptive conduct by failing to disclose his association with a product provider and misleading clients in relation to product fees.
The ban prevents Summers from providing any financial services, controlling an entity that carries on a financial services business and managing, supervising or auditing the provision of financial services and providing training about financial services or products.
ASIC found Summers engaged in misleading or deceptive conduct by failing to disclose referral fees and misleading clients in relation to product and ongoing contribution fees. He failed to provide appropriate advice and advice that was in his clients’ best interests.
ASIC found that both Furnell and MSummers failed to disclose the risks associated with an investment product and ASIC has reason to believe they are not adequately trained or competent to provide one or more financial services.
Furnell and Summers have the right to appeal to the Administrative Appeals Tribunal for a review of ASIC’s decision.