AAT grants stay of adviser ban
The Administrative Appeals Tribunal (AAT) has granted a stay of a permanent ban of a former RI Advice Group authorised representative, who was banned by the Australia Securities and Investments Commission (ASIC) from providing financial services in June this year.
Robert Hutchison from Perth, the authorised representative of the Onepath-owned firm, which is a subsidiary of ANZ, was found to have misled or deceived his clients by failing to disclose that they had been double-charged advice fees and failed to comply with proper processes for remitting and reporting the fees.
Hutchison was at RI Advice Group between May 2007 and November 2012. An ASIC investigation found that between January 2011 and November 2012 Hutchison acted dishonestly.
Hutchison’s lawyer, James Xenidis, director of LFS Lawyers, said in a statement: “This case highlights a concern that ASIC has formulated a position to permanently ban an adviser based on information provided to it by a licensee without undertaking its own investigation to validate the information provided (to ASIC under notice)”.
In the stay order, the AAT deputy president said the misconduct by Hutchison occurred in the period he was banned and it has not been alleged he had repeated that conduct or any other misconduct in the interim period of almost five years.
The deputy president also said since the reason for the banning order was concern about dishonest behaviour and repetition of such behaviour, the passage of that period of time without that concern being justified should be considered.
“Mr Hutchison’s evidence before the delegate included material as to the absence of intent on his part for the double-charging which had occurred and assertions about the inadequacy of the procedures followed by RI Advice,” the deputy president said.
“Without evidence that the matters of concern mentioned by the delegate have in fact occurred, and in the light of the serious consequences which may ensue if the ban is not stayed, combine to make this a case in which I am of the opinion that it is desirable to order a stay.”
The deputy president also imposed an additional condition requested by ASIC, which would require Hutchison to provide copies of client communication to ASIC on a monthly basis.
Additionally, while the stay was in force, any payments made by clients for financial services would have to be made directly to InFocus Securities Respondent Australia, and are not to be made by deduction from the client’s account directly into any business or personal account conducted by Hutchison.
“The applicant is to request InFocus Securities to conduct a monthly reconciliation of fees paid by the applicant’s clients and report such reconciliation to the respondent, including any perceived breach of condition,” the deputy president said.
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