Has your financial adviser been banned?

Dealing with an adviser's misconduct

Good financial advice can help you achieve your financial goals, but advisers don't always do the right thing by their clients. When ASIC finds an adviser guilty of misconduct they can be banned from providing financial advice, either for a period of time or for life, depending on the seriousness of their actions.

Here we explain what to do if your adviser has been banned from providing financial advice and the steps you can take to check the advice you received is in your best interests.

Why financial advisers are banned

There are a number of reasons a financial adviser may be banned from providing financial advice. This includes when the adviser:

  • Fails to act in the best interests of their client
  • Prioritises their own interests over their client's
  • Fails to conduct ongoing reviews where the client has paid for ongoing advice services
  • Gives advice that is not appropriate for the client, leaving the client in a worse position than before they received the advice
  • Fails to keep proper client records
  • Provides false or misleading information to clients, such as recommending an unsuitable financial product or failing to disclose all product fees
  • Acts dishonestly and breaches client trust through fraud or misappropriation of funds
  • Engages in dishonest conduct relating to client records and applications for financial products

What to do if your financial adviser has been banned

Here are some things to consider if your financial adviser has been banned from providing financial advice.

Is the adviser allowed to contact you?

If your financial adviser has been banned from providing advice, they will no longer be legally allowed to give you advice on financial products or services.

However, if your adviser is also your tax agent or mortgage broker, they may still be able to give you those services if the services are not part of ASIC's banning order. You will need to decide whether to continue using your adviser for other financial services.

Your adviser can contact you to offer the services of an alternate adviser working under the same Australian financial services (AFS) licence, or to reassure you their advice was sound.

If they offer an alternate financial adviser you will need to work out if you are happy with the arrangement or whether you would prefer to find a new adviser.

If your banned adviser contacts you about providing financial advice, ask them to stop calling you and make a complaint to ASIC. You can also let your new adviser know, if you have one.

Find out why the adviser has been banned

If your adviser has been banned from providing financial advice you should read ASIC's media release about the banning to find out why the adviser has been banned. This may help you work out whether the advice you received was appropriate.

Review the advice you've been given

If something does not look right or there are things you don't understand in the advice provided by the banned adviser, you should raise this with the advice firm. They can review your advice and make sure it is okay.

If your advice has been part of a review process, you can ask the advice firm what they found and how they plan to rectify any inappropriate advice.

If you don't have your Statement of Advice you can request a copy from your adviser or advice firm. If you are not happy with the company's response, contact their external dispute resolution scheme.

When reviewing the advice you received, look at:

  • Your situation, needs and objectives - Is there an accurate description of your assets, liabilities, income and expenses, your goals and does it explain your risk profile?
  • The strategy and scope - Check the adviser has explained the advantages and disadvantages of different options and cash flow projections.
  • The products the adviser has selected - Check how these products fit into your overall strategy.
  • Investment balances - check that the initial investment was consistent with your investment funds and that transactions such as contributions, fees and investment returns are in line with what you expected.

See what to look for in finance advice for more information.

Check the ongoing advice fees you are paying

Check to see if you are paying an ongoing advice fee to the adviser. You'll find these details in the fees section of your Statement of Advice. You can also check your investment transactions to see if advice fees are being deducted.

Make sure you have been getting the advice you paid for and if you no longer wish to receive advice from the company where your adviser was working, opt-out of any ongoing advice fees you are paying.

Cancel any authorities you have given

When your adviser has been banned make sure you cancel any authorities you have given them such as a power of attorney, access to online accounts or authorities to transact on your behalf and make sure all correspondence regarding your investments is coming to you and not the adviser.

Unhappy with the advice you received?

If you are unhappy with the advice you received from the banned adviser, you can make a complaint through the adviser's internal dispute resolution system. The adviser's financial services guide (FSG) will tell you how to do this.

If you are not happy with their response, you can contact the relevant external dispute resolution scheme. The FSG will contain details of which external dispute resolution service the adviser belongs to. See how to complain for more details.

If your investments have left you in a worse financial position than before you received the advice, you can ask to have your advice reviewed. You may be entitled to a remediation payment if it's found that the advice you were given was inappropriate for your circumstances or you suffered a loss as a result of a criminal act by your adviser.

Choosing a new financial adviser

If you wish to continue getting advice from the same advice firm, you can allow them to allocate a new adviser to you.

Just remember that you don't have to just accept this new adviser, you can do your own research and interview the new adviser to make sure they are the right fit for your financial needs. Use our questions to ask a financial adviser to quiz them.

Starting with a new advice firm

You may choose to start fresh with a new financial adviser, someone who is from a different advice firm. To find a new adviser see our tips on choosing an adviser.

Before you engage their services, check the adviser is licensed to provide the type of advice you want.

Financial advisers register

If your financial adviser has been banned, don't be afraid to ask for a review of your advice or to seek financial advice elsewhere. Check the advice you received is appropriate for your needs and that the recommended investments are suitable for you.

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Last updated: 10 Nov 2017