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Tuesday 9 October 2018

18-303MR ASIC bans Spectrum Wealth financial adviser for three years

Spectrum Wealth Adviser, Gurumukh Singh Mehra, has been banned from providing financial services for a period of three years, after ASIC surveillance showed he failed to act in his clients’ best interests.

Through ASIC’s surveillance of life insurance advice, it was found Mr Mehra had failed to:

  • make reasonable enquiries into his clients’ relevant circumstances, such as obtaining existing superannuation and insurance information;
  • adequately investigate the clients’ existing financial products prior to making insurance recommendations;
  • compare the features and costs of any existing insurance with that recommended to clients; and
  • base all judgements on the clients’ relevant circumstances.

ASIC also found that Mr Mehra is not competent, or adequately trained, to provide financial services.

ASIC's MoneySmart website has useful information for clients of banned advisers.

Mr Mehra’s banning will be recorded on ASIC’s Financial Adviser Register. He has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC's decision.

Background

This outcome is a result of ASIC's Life Insurance Lapse Data Project (LILD Project). The LILD Project was established in August 2016 to make greater use of data to focus ASIC's surveillance of life insurance advice, with the aim of improving life insurance advice provided to Australian consumers.

Under the LILD Project ASIC receives reports from life insurers that list the names of advisers who meet specific thresholds relating to lapsed policies. ASIC analyses these reports and other data to identify a group of high risk advisers.

The resulting high-risk list is not in itself an assessment of poor quality advice. The list enables ASIC to target its surveillance activity. ASIC then reviews the quality of advice provided by advisers on the list to determine whether the advisers are acting in their clients' best interests.

Last updated: 14/11/2018 04:50