Former Guardian Advice adviser permanently banned
The Australian Securities and Investments Commission (ASIC) has permanently banned a former Guardian Advice insurance adviser for operating under a business model that put his own interests ahead of his clients.
Victorian insurance adviser, Andrew Moroney, was an authorised representative of the Suncorp risk advice business between March 2006 and April 2014, during which time he failed to follow financial services laws in relation to a number of his clients.
Moroney was found to have recommended his clients annually replace one insurance policy with another, resulting in high upfront commissions each year for each insurance policy that he replaced.
Clients who entered into new policies every year were at risk of exclusionary periods or revised terms, the corporate regulator said.
ASIC found that Moroney:
- Failed to make thorough enquiries about the clients' circumstances before advising them to change their life insurance policy;
- Failed to make reasonable enquiries into insurance policies already held by clients, as well as alternative policies;
- Falsely claimed he had conducted research on alternative life insurance policies when he had not done so; and
- Put his commercial interests before that of his clients.
ASIC deputy chairman, Peter Kell, said it was unacceptable for advisers to replace insurance policies with the aim of increasing commissions without valid reason.
"It puts clients' coverage at risk and drives costs in the sector, which are ultimately borne by consumers," he said.
Moroney has the right to apply to the Administrative Appeals Tribunal for a review of ASIC's decision.
Recommended for you
Proposed legislative changes to safe harbour duty could result in advisers having reduced professional indemnity costs, a joint submission by seven major licensees said.
With 66 per cent of newly established advice licensees being sole advisers, what are the risks and legal ramifications to consider when taking the plunge into self-licensing?
Despite its popularity, only 1 per cent of financial advisers say they have often discussed cryptocurrency with clients, CoreData said, fuelled by concerns of heavy legal expenses if the product goes wrong.
AFCA and the CSLR have signed a memorandum of understanding as to how they will support an efficient financial services sector via the scheme.
