Melbourne-based financial adviser Ashok Sherwal has been banned from providing financial services and performing any function in a financial services business for six years by the Australian Securities and Investments Commission (ASIC).
The conduct that resulted in Sherwal’s banning related to his activities when he was an authorised representative of Wealth and Risk Management between July 2015 and May 2016 and his time with Dover Financial Advisers between March and October 2017.
The corporate regulator said Sherwal advised clients in need of cash to replace their existing insurance and superannuation products, as well as to take out new insurance products, so that he could generate advice fees and insurance commissions.
Sherwal then used some of the fees and commissions he received to make cash payments to these clients.
The former adviser failed to identify the scope of the advice being sought by his clients and did not obtain complete and accurate client information, or base his judgement on his clients’ relevant circumstances, ASIC said.
These failures led to his clients receiving inappropriate advice that resulted in their superannuation balances being significantly eroded.
According to ASIC, Sherwal also failed to comply with the additional disclosure requirements when providing product switching advice.
In making its decision, ASIC found Sherwal misunderstood what the best interests duty required of him and demonstrated an inability to follow fundamental and proper financial advice processes.
Sherwal prioritised his own interests above those of his clients, and he did not exercise the degree of professionalism and judgement demanded of financial advisers. ASIC also found that Sherwal was not a fit and proper person due to his serious lack of professionalism and judgement.
Sherwal appealed to the Administrative Appeals Tribunal for a review of ASIC’s decision. The outcome was not yet determined.