ASIC: IFA adviser not so independent
A financial planner has been banned for five years after making product recommendations to clients resulting in financial benefits to a company of which she was the sole director.
The adviser, Melanie Hutson, was an authorised representative ofIFA Securitiesin Sydney from March 2002 to February 2003 though she now resides in Hobart, Tasmania.
AnAustralian Securities and Investments Commission(ASIC) investigation found that throughout 2002 Hutson made recommendations to seven clients to invest in two Panamanian registered companies, Global Placement Strategies Corporation (GPSC) and Veridian Corporation (Veridian).
Some of these investments were made through an Australian registered company - Strategic Placements Consultancy - of which Hutson was the sole director.
The ASIC investigation found that Hutson did not conduct sufficient enquiries about the suitability of investments in GPSC and Veridian prior to making the recommendations to her clients.
ASIC also says she did not consider the needs of her clients when making the relevant recommendations.
Throughout 2002 Hutson's clients invested over $1.4 million in GPSC and Veridian, and although some of these funds were returned to investors most have yet to mature.
As a result, ASIC found Hutson had failed in her duties as an authorised representative of a securities dealer to act honestly, efficiently and fairly.
Recommended for you
Licensee Centrepoint Alliance has completed the acquisition of Brighter Super’s annual review service advice book, via Financial Advice Matters.
ASIC has launched court proceedings against the responsible entity of three managed investment schemes with around 600 retail investors.
There is a gap in the market for Australian advisers to help individuals with succession planning as the country has been noted by Capital Group for being overly “hands off” around inheritances.
ASIC has cancelled the AFSL of an advice firm associated with Shield and First Guardian collapses, and permanently banned its responsible manager.
