ASIC TAKES ACTION AGAINST EQUITI ADVISERS

www.fsadvice.com.au

Volume 16 Issue 02 I 2021 News 7

Advice cops eight-year ban

A former ANZ and Infocus Securities financial adviser has been banned for eight years after ASIC found evidence of forgery and falsifying documents.

Lisa Lee, a Sydney-based former adviser, falsely witnessed binding nomination of beneficiary forms for 17 clients, backdated documents and falsified a client’s signature while a representative of ANZ.

Lee represented Infocus between 5 June 2010 and 15 June 2017, and ANZ between 19 September 2017 and 19 November 2018. She is no longer providing financial advice.

“Financial advisers must act with honesty and integrity in their dealings with clients. ASIC may ban a financial adviser if it has reason to believe that they are not of good fame or character or likely to fail to comply with the financial services law,” ASIC said.

She has appealed to the Administrative Appeals Tribunal to review of ASIC’s decision.

Lee joins a long list of former advisers in the Banned and Disqualified Persons Register.

Most recently, ASIC banned Andrew Hills for four years, a former Aon Hewitt adviser who enabled or authorised misleading and inaccurate letters about superannuation to be issued to some Aon Master Trust Members.

In April, former Apogee Financial Planning representative Ahmed Saad pleaded guilty for dishonestly obtaining financial advantage by deception for his role in an illegal retail superannuation scheme. fs The numbers

$165k

Total amount of conflicted remuneration in question.

ASIC takes action against Equiti advisers

Karren Vergara

ASIC is taking action against the financial services group for allegedly paying conflicted remuneration totalling $165,000 to its financial advisers who gave inappropriate SMSF and property advice.

Equiti Financial Services (Equiti FS) – which is now called DOD Bookkeeping and is in liquidation – will see the corporate regulator in the Federal Court for several alleged breaches of the Corporations Act 2001.

Between 26 October 2015 to 27 August 2018, ASIC alleges that Equiti FS paid three advisers bonuses worth $164,750 for property purchases made via clients’ SMSFs.

The bonuses applied to purchases arranged by Equiti Property, which is also a subsidiary of Equiti FS’s parent company Equiti Group.

The group also had a mortgage broking business Equiti Finance.

ASIC alleges that the bonus payments influenced the financial product advice provided or the choice of financial product recommended by Equiti FS advisers to retail clients.

ASIC also claims that between 18 May 2015 and 13 February 2018, Equiti FS advisers gave financial advice that was not in their clients’ best interests on 12 occasions.

Such advice contained recommendations to either establish an SMSF; rollover existing superannuation accounts into the SMSF; and purchase a property via the SMSF.

Court documents show that Statement of Advice prepared “was made in the absence of advice to the effect that the client take time to consider carefully the recommendation, along with other possible alternatives, prior to implementing the recommendation”.

On 30 June 2016 for example, one adviser received a monetary bonus from Equiti FS on almost every occasion he made a recommendation to a client in circumstances in which that recommendation was implemented by the client through the purchase of a property through Equiti Property, the documents show.

As such, ASIC deems the three advisers breached sections 963E(2) and section 963J of the Corporations Act on conflicted remuneration. fs

Government merges two major reviews

The federal government will fold the 2022 Life Insurance Framework Review into the Quality of Advice Review, taking over the responsibilities from ASIC.

The Quality of Advice Review will consider the LIF Review as part of its wider mandate, minister for superannuation, financial services, the digital economy and women’s economic security Jane Hume announced.

Speaking at the annual Financial Services Council Life Insurance Summit, Hume highlighted areas that overlap across the two reviews that prompted the move.

Under treasury’s new remit, it will consider the breadth of issues impacting the quality and affordability of financial advice and risk advice, she said.

“This will mean that once ASIC finishes its datacollection phase, this information will be provided to Treasury for further analysis in the context of the Quality of Advice Review,” Hume said.

Treasury will keep the issue of underinsurance and access to affordable advice front of mind in analysing the data.

Hume said the move will remove the duplication of work and save time for stakeholders by eliminating consultation times and submissions.

In early 2019, the Hayne Royal Commission recommended a review into the quality of advice in three years’ time that should be conducted by ASIC.

The review should be completed by 30 June 2022, but no later than 31 December 2022, the Royal Commission recommended. fs