ASIC bans GPS, former NAB and ANZ advisers

Mr Khaw, based in Sydney, was an authorised representative of NAB-owned Apogee Financial Planning and ANZ.

ASIC found he had failed to comply with financial services laws including the requirements to prioritise his clients’ interest, to comply with the best interests duty and to provide appropriate advice.

The regulator also concluded he was not adequately trained or competent to provide financial services and that he engaged in misleading conduct by backdating file notes.

A review of Mr Khaw’s advice files revealed that his clients wanted to purchase an investment property and were referred to him by an associated mortgage broking business.

Despite having differing needs and circumstances, Mr Khaw advised almost all of his clients to establish a self-managed superannuation fund (SMSF), or use an existing SMSF, and to use Limited Recourse Borrowing Arrangements (LRBAs) to fund the purchase of a property.

ASIC found that Mr Khaw failed in his duty as a financial adviser to put in place a strategy that was in the client’s best interests.

Mr Khaw was said to have failed to provide a professional, independent assessment of whether an SMSF, which borrowed to invest in property, was an appropriate strategy for his clients.

The regulator concluded that Mr Khaw put his own interests ahead of the interests of his clients and that his advice exposed a number of his clients to financial harm.

Meanwhile Mr Rothnie, a representative of GPS Wealth, has copped his ban for failing to act in the best interests of his clients and failing to provide appropriate advice.

ASIC said its decision to ban him was a result of its Life Insurance Lapse Data project in 2016, with life insurers having provided information that led the regulator to investigate a number of advisers.

Mr Rothnie was found to fail to properly investigate and document his clients’ financial and personal circumstances.

He also was said to have failed to give adequate consideration to his clients’ existing insurance products before making a recommendation to switch them, which resulted in clients being worse off.

He had been banned on 29 July, but pending an application to appeal the order to the Administrative Appeals Tribunal, as well as an application staying the operation of the ban and to keep the ban and the appeal against it confidential, ASIC agreed not to publicise it.

On 23 October, the tribunal ordered there should be no stay and that neither the ban or the appeal should be confidential – but it is yet to consider Mr Rothnie’s appeal against the banning order itself. 

The banning of Mr Rothnie and Mr Khaw will be recorded on ASIC’s publicly available Financial Advisers Register and on the Banned and Disqualified Persons register.

Mr Khaw has a right to appeal to the AAT for a review of ASIC’s decision.