Enforcement: AUS bans financial adviser for five years for bad advice
David Radovan, of Donnybrook, Western Australia, has been banned from providing financial services for five years after an ASIC investigation revealed concerns with the appropriateness of his advice to retail clients. And found that it was likely Radovan would continue not to comply with financial services laws in the future.
Radovan, 47, recommended financial products to more than 30 clients while acting as an authorised representative of Infocus Securities Australia Pty Ltd (Infocus) between 25 July 2006 and 16 October 2008. Radovan operated from an Infocus branch in Northbridge, Western Australia, during this time.
In a number of cases, ASIC found Radovan didn’t have a reasonable basis for the advice he gave and failed to consider the personal circumstances of his clients prior to making recommendations to invest in various financial products.
ASIC’s investigation also found Radovan engaged in misleading and deceptive conduct and failed to provide clients with documents required under the Corporations Act, such as statements of advice and product disclosure statements.
In summary, ASIC found Radovan failed to:
- have a reasonable basis for the advice he gave to retail clients of Infocus
- provide statements of advice when required
- provide product disclosure statements and financial services guides when required
- overexposed client portfolios to higher risk (niche) products in breach of Infocus’ policies
- engaged in misleading and deceptive conduct in relation to the financial services he provided and/or induced clients to deal in the financial products he recommended.
Radovan also recommended that clients invest by utilising investment loans, including margin loans. His failure to adequately assess the clients’ circumstances and objectives when recommending the investments, in conjunction with the use of finance, resulted in most clients being over-geared and exposed to significant financial risk.
Radovan has the right to lodge an application for a review of ASIC’s decision with the Administrative Appeals Tribunal.
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