Victorian adviser’s ban upheld

Pamela Anderson, who was authorised by Australian financial services licensee The Financiallink Group Pty Ltd (Financiallink), now Nextgen Financial Group Pty Ltd, during the period of misconduct, provided personal advice to retail clients through her practice, Anderson Lutgens & Co Pty Ltd trading as Beyond iWealth.

ASIC said that it found Ms Anderson recommended that some of her clients invest in high-risk fund, the Investport Income Opportunity Fund (IIOF). IIOF was operated by an entity related to Ms Anderson’s former licensee, Financiallink.

The AAT affirmed ASIC’s decision, which also prohibited Ms Anderson from managing, supervising or auditing the provision of financial services, and the provision of training about financial services or financial products until the conclusion of the ban. The AAT affirmed ASIC’s findings that Ms Anderson:

• failed to act in the best interests of her clients, and to provide appropriate advice by not taking into consideration her clients’ preferences for ethical investments;
• failed to prioritise her clients’ interests by advising them to invest in IIOF in circumstances where the applicant knew, or ought to have known, that there was a conflict between the interests of the clients and her own interests as the recipient of loans from IIOF;
• gave non-compliant statements of advice to clients and failed to provide additional disclosure regarding the costs and benefits lost as a result of switching from one product to another.

The AAT said it found that Ms Anderson failed to comply with these duties when giving advice to other clients to invest in the IIOF and when providing advice to establish and invest in or through a self-managed super fund.

The AAT accepted ASIC’s submissions that Ms Anderson was under independent and distinct obligations than those owed by her licensee to comply with her professional obligations and that her conduct was not excused or explained away by a reliance on the instructions, procedures, or process of her then licensee.

Further, the AAT accepted ASIC’s submission that had Ms Anderson acted consistently with her obligations as an advisor, virtually none of her clients would ever have been advised to invest in the IIOF, or have invested in it, and they would not have been affected by the collapse of the IIOF.

Ms Anderson has 28 days to appeal the AAT’s decision to the Federal Court.