ASIC, Financial Planning

ASIC bans SMSF adviser for dishonest loans

ASIC bans SMSF adviser

ASIC bans a former Victorian SMSF adviser after he borrowed money from clients’ accounts and breached a range of financial services laws.

The Australian Securities and Investments Commission (ASIC) has permanently banned a Victorian financial adviser who dishonestly borrowed money from his clients’ SMSFs as part of a range of misconduct that also included providing unlicensed advice.

The corporate regulator banned Robert Michael of Bentleigh, Melbourne, from providing financial services after its investigation found that between April 2012 and September 2018 he had engaged in dishonest, misleading and deceptive conduct by obtaining loans from four of his clients’ SMSF accounts totalling $204,000.

ASIC found the loans were being used for personal expenditure and Michael had used the funds to avoid bankruptcy, pay private school fees, for gambling and for general expenses.

Additionally, it found he had:

  • failed to disclose commissions on financial investments that he recommended and implemented on behalf of clients,
  • recommended financial investments without disclosing that a conflict of interest existed,
  • failed to prioritise his clients’ interests ahead of his own,
  • failed to act in the best interest of his clients in relation to loans procured from clients and recommending high-risk investments that were contrary to clients’ risk appetites, and
  • failed to provide clients with statements of advice, product disclosure statements and fee disclosure statements.

Michael had been an authorised representative of Marigold Falconer International Pty Ltd and Allied Financial Solutions Pty Ltd through his business RM Wealth Management Pty Ltd from August 2009 to July 2017.

Given his behaviour continued until September 2018, ASIC also found he had engaged in unlicensed financial advice beyond the cessation of his authorisation as a financial adviser.

The regulator made its decision to ban him on 26 July after it found he had breached financial services laws and was not of good fame and character, and the ban has been recorded on ASIC’s Financial Advisers Register.

Michael has the right to lodge an application for review with the Administrative Appeals Tribunal.

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