ASIC has banned a financial adviser from providing financial services for five years in connection to superannuation and insurance switching advice.
ASIC announced that it had banned Beenleigh financial adviser Frazer Jon Muscat from providing financial services for five years, following surveillance by ASIC of advice he gave while an authorised representative of Bristol Street Financial Services Pty Ltd.
ASIC cancelled the Australian Financial Services licence of Bristol Street Financial Services in December 2018, after uncovering “widespread non-compliance with financial services laws”. Mr Muscat was also a responsible manager of the Bristol Street Financial Services licence.
“ASIC’s review of Mr Muscat’s advice found that he failed to take into account his clients’ individual circumstances because he used a templated approach for all clients. He developed an ‘insurance needs calculation template’, which recommended his clients apply for levels of insurance that were higher than their circumstances required. In many cases, his recommendations were at complete odds with his clients’ current objectives and needs,” said ASIC.
“Mr Muscat also switched the superannuation accounts of some clients from one provider to another without investigating their existing arrangements. In other cases, he recommended switching to a more expensive product without demonstrating that the switch would be in his clients’ best interests.”
“In focusing his advice on switching insurance and superannuation, Mr Muscat also failed to provide advice on other relevant areas specifically requested by his clients, such as debt reduction and cash flow management.”
Mr Muscat has the right to appeal ASIC’s decision to the Administrative Appeals Tribunal.
The banning order will be shown on ASIC’s Financial Advisers Register.
ASIC Commissioner Danielle Press said: “When providing personal advice, ASIC expects financial advisers to take reasonable steps to understand their clients’ individual circumstances, needs and objectives before making any recommendations.”
“Advisers have a legal obligation to act in the best interests of their clients at all times and, because client circumstances often vary considerably, using a templated approach will not produce the most appropriate advice recommendations in all instances.”