Ex-Spectrum adviser banned for five years

26 May 2020

The corporate regulator has banned former Spectrum Wealth adviser, Sean Philip Lewis, for five years after advising most clients to use a limited recourse borrowing arrangement (LRBA) and providing insurance advice to generate large commissions for himself.

The Australian Securities and Investments Commission (ASIC) said the Hunter Valley-based adviser failed to comply with financial services law, failed to provide advice that was in the best interests of his clients, and failed to provide advice that was appropriate for his clients’ objectives.

The LRBAs were used to fund the purchase of real property through a self-managed superannuation fund (SMSF) but Lewis did not assess whether the strategy was appropriate for each of his clients.

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“He also did not adequately investigate or offer any alternative investment strategies that may have provided greater diversification of risks,” ASIC said.

ASIC also found when providing insurance advice, Lewis prioritised his own interests over that of clients as the advice would generate large commissions for himself, regardless of whether the recommended products were appropriate for his clients.

Lewis was an authorised representative of Spectrum between December 2013 and June 2018, and was most recently an authorised representative of Consolidated Mercantile Group between July 2019 and January 2020.

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What was he thinking? Seriously, he should have been working for a Union - could have then made sure the employees Super went to the correct Industry Fund and they would have given the clients Insurance no worries.

Not condoning his behaviour. But...Once again. The only thing which actually got him in trouble was the fact that he is a finacial adviser.

Mortgage brokers/butyers agents/accountant do exactly this all the time. This is their business model. They are allowed to do exactly what financial advisers do without any compliance, training or need to comply with BID.

Why would anyone ever want to waste 4 years at university to become a financial adviser when you can sell excactly the same service/product just without the cost, regulation, training, compliance that only advicers have to worry about.

Have you looked this person upon the ASIC Register ? He is a mortgage broker by trade and dabbled in financial planning.

And dabbling in financial planning was his undoing. If he'd just stayed a mortgage broker he could have done exactly the same thing without any regulatory scrutiny. It's the same trap some naïve accountants have fallen into, getting a limited licence for SMSF advice. Crafty accountants know that getting a licence just brings you into the financial adviser persecution regime. It makes you a target. If you give financial advice without a licence then the regulators will never bother you.

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