The Australian Securities and Investments Commission (ASIC) has imposed a four-year ban on Gold Coast-based financial adviser Andrew Rankin, preventing him from providing any financial services, controlling an entity that carries on a financial services business and performing any function involved in the carrying on of a such a business.
The sanctions were imposed after the regulator found Rankin gave inappropriate financial advice while he was an authorised representative of Next Generation Advice and in doing so failed to act in his clients’ best interests.
In particular, ASIC determined Rankin recommended clients establish an SMSF and then had them invest the majority of their retirement savings into the Global Capital Property Fund (GCPF), currently in liquidation, and the Pivotal Diversified Fund.
The corporate watchdog established Rankin did not act in the best interests of his clients when providing advice due to the fact he did not identify the clients’ objectives and needs by accepting a request to establish an SMSF and rollover their current superannuation to the new fund, investing the majority of their capital into GCPF and the Pivotal Diversified Fund, identify the subject matter of advice and conduct a reasonable examination of the products involved to see if they met his clients’ needs.
Further, it found the advice Rankin gave was inappropriate because GCPF and Pivotal were both speculative, illiquid investments with no historical return data, the advice placed clients in more complex and onerous SMSF environments compared to public offer super funds in which they were previously members, and the advice in question led to significant fee increases.
Projections included in the statements of advice Rankin prepared were also seen by the regulator to have included projections that were misleading and deceptive.
Finally, ASIC ruled Rankin had a conflict of interest he should have recognised because clients had been referred to him after another Next Generation Advice authorised representative had performed a ‘superannuation health check’ for them.
The banning order took effect from 14 August this year and the practitioner involved has the right to challenge the decision in front of the Administrative Appeals Tribunal.
