Scaled advice model leads to second FSCP prohibition order

FSCP ASIC adviser ban SMSFs

12 December 2023
| By Jasmine Siljic |
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The Financial Services and Credit Panel (FSCP) has issued a registration prohibition order against a financial adviser for misleading conduct towards a client.

Financial adviser Stephen Rogers was found to have provided non-compliant financial advice to a client in a manner which was deceptive or misleading, the body found.

Specifically, Rogers inappropriately used a scaled or limited advice model which excluded the suitability of a self-managed super fund (SMSF) or the suitability of an SMSF investing into products relating to the adviser’s licensee.

“Rogers’ adoption of the scaled advice approach in relation to the client was not appropriate in circumstances where:

The referral of the client had not been at arm’s length (as the referrer received a significant referral fee and had introduced the “investment opportunity” to the client),
The client had been given contradictory information and statements such that a reasonable person would conclude that Rogers was in effect, giving her advice on the areas that were purportedly excluded, and
The effect of the scaled advice was to exclude critical issues that were relevant to the client’s subject matter.”

He also used a rate of return in the benefit comparison in his Statement of Advice (SOA).

The adviser's registration has been cancelled until after 6 December 2025 and cannot register with ASIC until this date. He is also prohibited from providing personal advice to retail clients on relevant financial products during the two-year period.

“ASIC convened a sitting panel of the FSCP for Rogers as part of ASIC’s cross-sector priority to deter cold calling superannuation switching business models which has the broader aim of protecting consumers from cold calling practices that induce inappropriate superannuation switching and result in the erosion of members’ superannuation balances,” the statement said.

Last week, the FSCP cancelled the registration of another financial adviser, Timothy Anderson, until after 17 May 2025 due to his insolvency under administration. 

“The Sitting Panel decided to make the registration prohibition order because it is satisfied that there is a real risk of harm being caused to the public’s confidence in the financial services industry, and to ASIC’s reputation, if an undischarged bankrupt is permitted to continue to give personal advice to retail clients about relevant financial products.”

The FSCP delivers administrative decisions on matters referred to it by ASIC that relate to the conduct of advisers. 

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AUTHOR

Submitted by get rid of them all on Wed, 2023-12-13 09:41

what a grub - make the ban permanent.
This is the kind of behaviour ruining it for all advisors

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