Allegation of commercial motives behind breach reports
It is not unknown for commercial disputes between planners and their licensees to result in compliance reports to the Australian Securities and Investments Commission (ASIC), according to Dover Financial Advisers principal, Terry McMaster.
Giving testimony before the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, McMaster sought to explain why Dover had opted to employ a former Financial Wisdom planner, Julie Hamilton, despite her acknowledging that her licensee had told her she was being reported to ASIC with respect to a “substantial breach”.
The Commission heard that having been informed by Hamilton of her circumstances, McMaster had responded “I am not unduly troubled by this” and added that Dover would take her on “today or tomorrow”.
Asked by counsel assisting the Royal Commission, Mark Costello why he would adopt such an attitude, McMaster said Dover had been very aware of the circumstances surrounding Hamilton and that commercial disputes could very often generate negative reports to ASIC.
“It had all the hallmarks of that,” he said.
Under further questioning from Costello, McMaster acknowledged that Hamilton had subsequently been banned by ASIC.
Hamilton was banned in December, last year, following an ASIC investigation into advice provided by her whilst she was an authorised representative of Financial Wisdom, with the regulator finding that she had failed to act in her client’s best interest. McMaster, who is a lawyer, said he had represented Hamilton in the matter.
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