ASIC has banned a former Sydney financial adviser for four years after finding he used a cookie-cutter approach for most of his clients and recommended they set up an SMSF with a limited recourse borrowing arrangement (LRBA) over property.
The corporate watchdog banned Adrian Khaw as a result of surveillance of his activities while he was an authorised representative of ANZ from 2010 to 2015 and of NAB-owned Apogee Financial Planning from 2015 to 2018.
As a result of the surveillance, ASIC found Khaw failed to comply with financial services laws, including the requirements to prioritise his clients’ interests, failed to comply with the best interests duty and did not provide appropriate advice. He was also found to not be adequately trained, or competent, to provide financial services and to have engaged in misleading conduct by backdating file notes.
Specifically, when reviewing Khaw’s advice files, ASIC found a number of clients were advised to establish an SMSF, or use an existing SMSF, and to use an LRBA to fund the purchase of a property, despite the clients having differing needs and circumstances. These clients were referred to him by an associated mortgage-broking business because they were interested in purchasing an investment property.
ASIC also found Khaw:
- failed in his duty as a financial adviser to put in place a strategy that was in the client’s best interests,
- failed to provide a professional, independent assessment of whether an SMSF that borrowed to invest in property was an appropriate strategy for his clients, and
- put his own interests ahead of the interests of his clients and that his advice exposed a number of his clients to financial harm.
Khaw’s ban will be recorded on ASIC’s Financial Advisers Register and Banned and Disqualified Persons Register. He has the right to appeal to the Administrative Appeals Tribunal for a review of the decision.
