The Australian Securities and Investments Commission (ASIC) has detailed the poor conduct that led to a Queensland director being banned for misconduct earlier this week.
James Carlos Reynolds of Robina, Queensland, sole director of Totem Wealth, purported to be a financial adviser and was permanently banned earlier this week for lacking honesty, integrity and professionalism.
He was banned from providing financial services, controlling an entity that carries on a financial services business and performing any function involved in carrying on a financial services business.
In a statement to Money Management, the regulator said his poor conduct related to deceiving clients, transferring client funds to his own account and falsely claiming to be a financial adviser.
“Reynolds transferred money from one of his client’s accounts to his own account and accounts he controlled. He acted beyond the client’s permission, gaining access to the account by telling the client he would use the funds in the clients account to pay the clients’ mortgage, when in fact he transferred the funds to his own accounts.
“In the course of running Totem Wealth, Reynolds deceived his clients when he claimed to offer a ‘100% money back’ guarantee, which he did not honour.
“Reynolds falsely held out that he was a financial adviser to a client, despite the fact he did not hold an Australian financial services licence and was not an authorised representative of a licence holder.”
He had the right to appeal to the Administrative Appeals Tribunal for a review of ASIC’s decision and the banning had been recorded on the Banned and Disqualified Persons Register.
While it’s great to see someone who incorrectly claimed to be a financial adviser punished for doing so, it would be even better if regulators and media organisations who incorrectly and knowingly claim wrongdoers are financial advisers, were also held to account.
The broader damage to consumers caused by regulators and media organisations discrediting and undermining professional financial advice is far greater than the isolated actions of a few crooks. Regulators and media are significant contributors to consumers unnecessarily eschewing professional advice, and being disadvantaged by scams, duds, and poor DIY decisions as a result.
Good to see MM follow up this. well done.
Thanks ASIC for clearing that up… I’m not even going to pretend that none of us thought it was a financial adviser who was being banned!!
So, I’m guessing that actual “licensed financial advisers” won’t have at least one of those issues to be concerned about, and the rest of us (I expect) don’t steal funds from clients…
I think the lesson we can learn from this is that ASIC can be more deceptive than some of their victims when reporting their actions.
Good to know the details.
Sticks in my craw though that the ASIC levy would pay for this action, when the guy wasn’t an adviser.
Ms Dew, your headline is false and misleading and it is very disappointing that the financial services press is working against the profession in this manner.
Clearly, this individual was NOT a financial adviser. Based on the facts within your story, he was a criminal. That is it! Please report facts accurately.
If he wasn’t a licenced financial adviser why are you even referring to him as a financial adviser. He wasn’t, he was a crook plain and simple! This type of reporting does little to help the industry.
Just lock him up. I’m so fed up with hearing stories of individuals claiming to be advisers when they are not. We need a strong deterrent.
Sounds to me like he was not a Queensland financial adviser…
If someone impersonating a police officer gets caught busting people to line his own pocket, would the article be titled, a Queensland police officer was busting people to line his own pocket… I doubt it. It would more likely read a man impersonating a police office was …. Why do media who rely on financial advisers to read their news keep damaging the industry that supports them??
good decision by ASIC on this one to kick out this thief. bye bye. there is no place in the financial advice profession for this type of misconduct.
the next thing ASIC need to do is to stamp out the use of “award-winning adviser” (that term) we all know what it is, they are dishonest, misleading, and deceptive (remember financial advisers have an overarching obligation aside from the FASEA code to act fairly, honestly and efficiently). if you use that term it should be qualified with a disclaimer that goes something like this:
I submitted an application for myself to a marketing company whose fame and repute in the financial advice profession is dubious at best. that firm generates income by selling space on its marketing brochure. I was not peer-reviewed and voted on by my peers. the panel of judges on that marketing company who have no experience or expertise in financial advice and who have only a remote idea of what financial planning constitutes voted me as the “winner” of a category of which there are multitudes of categories.
ironically, most of these award winners get banned by ASIC within a year or two. we really need to stamp this out by our profession. the FPA and AFA need to lead on this by stating that you must disclose the “award-winning criteria” even the Americans are doing that.
we all know, if we don’t lead the profession on this issue ASIC will and they will then use a blunt instrument to cut everyone off. even those truly awarded I have seen many some who have multiple advanced degrees (5 +) and designations (5+) all earned by diligence and hard work do not promote themselves that way. I really wish the FASEA code had added professional behavior as one of the codes and how you can market yourself. even the accountants (it’s really embarrassing) have it:
APES Code 110 subsection 115 professional behavior:
1) member shall not engage in activity that impairs or might impair … good reputation of the profession (R115.1)
2) exaggerated claims for the services offered
the truly qualified financial planners and the most successful ones are not well-known in the industry (because they don’t want to partner with product manufacturers). we should change if we truly want to be known as a renowned and respected body of professionals.
we have a duty to call out these instances when we see it (standard 12)
This is irresponsible reporting.
Why does it say “led to a Queensland financial adviser being banned” in the bold text at the top.
When in the second but last para it states “despite the fact he did not hold an Australian financial services licence and was not an authorised representative of a licence holder”
This guy was a fraud according to ASIC and was NOT a financial adviser, he was a con man by the sounds of it.
How will we develop and grow the reputation of the all the good financial advisers out there (that actually have a license) when our own industry rags cannot support us?