The Australian Securities and Investments Commission (ASIC) has banned a Queensland SMSF financial adviser for four years and suspended his Australian financial services licence (AFSL) for failing to act in his clients’ best interests.
The corporate regulator banned James Cribb and suspended his AFSL, held by Mode AFSL Pty Ltd, for 10 weeks, after finding he prioritised his own interests over those of his clients by providing advice that was likely to benefit other entities related to him.
ASIC identified Cribb’s advice failures in its recent review of SMSF advice in “Report 575 SMSFs: Improving the quality of advice and member experiences”. He had a number of client files included in the representative sample investigated for the report.
Cribb was also an authorised representative of Axis Investment Centre from 9 August 2010 to 14 August 2017.
“These client files related to advice Mr Cribb provided whilst he was an authorised representative of Axis,” the regulator said.
“ASIC subsequently commenced a targeted surveillance on Mr Cribb to test a larger sample of advice he had provided whilst he was an authorised representative of Axis and Mode.”
This included an SMSF administration business for which he was the sole director and a shareholder.
ASIC found he had failed to investigate the individual circumstances of his clients, adequately investigate alternative strategies and products that may have suited his clients’ objectives and prioritise his clients’ interests over his own.
The regulator also suspended Mode’s AFSL after finding the firm failed to take reasonable steps to ensure its representatives complied with financial services laws.
Cribb was not only the authorised representative, but also the sole key person and responsible manager of Mode since 20 July 2017.
Mode’s AFSL will be suspended for 10 weeks from 10 July or until it obtains approval for a replacement key person and responsible manager from ASIC.
Cribb’s banning will be recorded on ASIC’s financial adviser register.
Mode and Cribb have the right to appeal to the Administrative Appeals Tribunal for a review of ASIC’s decision.
