Financial adviser struck off for duty of care breaches

Financial adviser struck off for duty of care breaches

The recent banning of a financial adviser has highlighted to both advisers and those who engage their services of the legal obligations that govern firms providing financial services.

ASIC announced it has banned financial adviser Lawrence Toledo from providing any kind of financial services for a period of seven years, after it found Mr Toledo had “failed to act in the best interests of his clients.”

The findings relate to advice he provided to an unknown number of clients about establishing self-managed super funds (SMSFs) in order to purchase property.

They claim Mr Toledo did not “properly identify what it was that his clients wanted advice on, and to reasonably investigate what financial products would best suit their needs; understand what was required of him to comply with the best interests duty; and provide advice that was appropriate to the clients.”

The action taken against Mr Toledo demonstrates the severity of action open to financial advisers who do not act in their clients’ best interest, which forms part of the Future of Financial Advice (FOFA) reforms that took initially took effect from 1 July 2013.

“Financial advisers have a clear duty to act in their clients' best interests," said ASIC deputy chair Peter Kell.

“In some cases, advice to establish an SMSF for the sole purpose of purchasing a property may not be in a client's best interests, particularly where the SMSF borrows funds to enable the purchase,” he added.

According to ASIC, Mr Toedo still has the right to appeal the verdict.

Financial adviser struck off for duty of care breaches
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