The banning of Frazer Jon Muscat follows an ASIC surveillance that looked at advice he provided to clients when he was an authorised representative of Bristol Street Financial Services, according to a statement.
ASIC cancelled the licence of Bristol Street Financial Services in December last year after it found it had widespread non-compliance with a number of laws.
Its review of Mr Muscat’s advice found that he failed to take into account his clients’ individual circumstances because he used a templated approach for all clients.
ASIC found that he developed an ‘insurance needs calculation template’, which recommended his clients apply for levels of insurance that were higher than their circumstances required. In many cases, his recommendations were at complete odds with his clients’ current objectives and needs.
It said Mr Muscat also switched the superannuation accounts of some clients from one provider to another without investigating their existing arrangements and, in other cases, he recommended switching to a more expensive product without demonstrating that the switch would be in his clients’ best interests.
In focusing his advice on switching insurance and superannuation, ASIC also found that Mr Muscat failed to provide advice on other relevant areas specifically requested by his clients, such as debt reduction and cash flow management.
“When providing personal advice, ASIC expects financial advisers to take reasonable steps to understand their clients’ individual circumstances, needs and objectives before making any recommendations,” said ASIC commissioner Danielle Press.
“Advisers have a legal obligation to act in the best interests of their clients at all times and, because client circumstances often vary considerably, using a templated approach will not produce the most appropriate advice recommendations in all instances.”
The banning of Mr Muscat has been recorded on ASIC’s Adviser Register.
Prospective Client: (Call Centre Contact) I’m thinking of changing my super over to you
ISF Employee: No worries do you have your existing Super fund ABN handy?
Prospective Client: Yes
ISF: Great I can do that for you right now.
And within 20 minutes it’s done!
Happens every day NO Fact Find, NO comparison between funds, NO SOA , NO best interest duty etc.
But hey they don’t pay commissions so that makes it OK.
Would be interesting to see if industry super fund advisers would be put under the same scrutiny, debt management and cash flow never covered off as they don’t provide this advice, all clients placed into the same superannuation product usually with low grade group cover, and yet ASIC is stating here very CLEARLY that template advice is inappropriate as each clients needs are different?????? I agree but give me a break, go and apply these same standards to industry super fund advisers then i will take you seriously.
So if ASIC can be the sole arbiter of what constitutes best interest then AFSLs are effectively meaningless, our SOA templates, compliance audits, APLs etc should be done by Canberra
I would really love to see a ‘breaking news’ bulletin for the adviser attached to every claim paid…. our profession has taken enough of a beating, lets just focus on the positive. There are so many good news stories and so many lives that are better off because of a great financial plan – please don’t sell advice short by making these events rank higher than our collective wins….
every 2nd day there is a adviser banned.. ASIC are on a mission to seek and destroy.. perhaps we could make a Hollywood movie… PREDATOR
Interesting…… ‘levels of insurance higher than their circumstances require’. Surely this means that ASIC did a full fact find and client analysis to come up with their accurate figure. I’m not saying this adviser did nothing wrong or didn’t deserve to be banned – but part of ASIC’s reasoning is surely basic on their subjective observation that the insurance cover was too much. I have never heard of a single case where someone had ‘too much cover’ (apart from IP of course) and then refused to take the extra payout in the event of a claim.
rookie mistake by this adviser. If only he’d been with a bank and used their templated SOAs, needs analysis and safe harbour checklist (aka BID doesn’t matter checklist), he would’ve been sweet!
every day a adviser, small afsl doesn’t matter what day it is. wonder why advisers are leaving? new education, more pi costs, more compliance and lif…..