ASIC has banned a financial adviser from providing financial services for three years for breaching the best interest duty relating to advice to establish SMSFs and borrow to acquire real property.
ASIC found that Jason Sean Atkins had breached the best interest duty, which was introduced as part of the FOFA reforms, when he advised clients to establish SMSFs and use Limited Recourse Borrowing Arrangements (LRBAs) to acquire real property.
ASIC says Mr Atkins failed to act in the best interest of four clients. ASIC “was not satisfied” that he had identified the subject matter of the advice, conducted a reasonable investigation of the financial products that might achieve the objectives and meet the needs of the client or “understood what was required of him to comply with the best interest duty”.
In a statement announcing the ban ASIC points to the ‘safe harbour’ in Regulatory Guide 175, “which are relevant even when a client expresses a specific preference for a particular strategy or financial product”.
Mr Atkins was formerly an authorised representative of Magnitude Group Pty Ltd, which is a subsidiary of Westpac Banking Corporation. He has also been appointed by a corporate authorised representative of Magnitude Group called Wealth Plus Solutions Pty Ltd and has been an authorised representative of Genesys Wealth Advisers Limited. Though it is unclear from the ASIC statement which firm Mr Atkins was a representative of when he gave the advice in question.
The banning of Mr Atkins is part of ASIC’s Wealth Management Project, which was established in October 2014 to lift the standard of major financial advice providers. It focuses on the conduct of NAB, Westpac, CBA, ANZ, Macquarie and AMP. ASIC has so far banned 34 advisers from the financial services industry as part of the Project.
ASIC Commissioner John Price said: “Financial advisers must act in the best interests of their clients. ASIC is committed to improving conduct in the wealth management industry and we will act to remove individuals who do not live up to the high standards expected of financial advisers.”
Mr Atkins has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC’s decision.