ASIC bans Queensland financial adviser for five years

ASIC's surveillance looked at advice Mr Forster provided to clients while he was an authorised representative of Australian Financial Services Licensees (AFSL) Breakaway Finance Group and ANZ-owned Millennium3.

The surveillance found that Mr Forster had failed to take into account his clients' actual circumstances when providing advice; instead he obtained limited information and made a series of assumptions about their personal circumstances.

Furthermore, ASIC revealed, he recommended new superannuation and insurance products to his clients without considering their existing products and services.

"In many cases, Mr Forster recommended insurance where the premiums were unaffordable," ASIC said. 

"Even though the premiums were paid out of his clients’ superannuation, sometimes they were significantly more than his clients’ normal superannuation contributions, potentially leading to erosion of the clients’ superannuation balance."

According to ASIC, Mr Forster had also significantly understated the costs associated with implementation of his advice, particularly costs associated with running a self-managed super fund.

In some other cases, the commission also found that Mr Forster had not complied with the requirements for a statement of advice – instead of disclosing the dollar value of fees, he had described fees in percentage terms.

"ASIC expects financial advisers to adequately understand their clients’ personal circumstances and take those circumstances into consideration when providing personal advice," ASIC said. 

"When recommending that clients dispose of or acquire financial products, advisers must fully disclose the costs associated with their advice so that clients can make informed decisions,."