AAT affirms ASIC decision regarding Victorian adviser ban

The Administrative Appeals Tribunal (AAT) has affirmed the decision by the Australian Securities & Investments Commission (ASIC) to ban Pamela Anderson, a financial adviser from Victoria, from providing financial services for two years.

Anderson was previously authorised by the Financiallink Group Pty Ltd, an Australian financial services licensee (now called Nextgen Financial Group Pty Ltd), at the time of the misconduct. She had provided personal advice to retail clients through her practice, Anderson Lutgens & Co Pty Ltd, trading as Beyond iWealth.

ASIC found that Anderson had advised some of her clients to invest in the Investport Income Opportunity Fund (IIOF), which was a high-risk fund operated by an entity that was related to Financiallink.

The AAT affirmed the ASIC decision which prohibited Anderson from managing, supervising, or auditing the provision of financial services, as well as the provision of training about financial services or financial products until the ban is over.

It also affirmed the following ASIC findings that Anderson:

• failed to act in the best interests of her clients, and to provide appropriate advice by not taking into consideration her clients’ preferences for ethical investments
• failed to prioritise her clients’ interests by advising them to invest in IIOF in circumstances where the applicant knew, or ought to have known, that there was a conflict between the interests of the clients and her own interests as the recipient of loans from IIOF
• and gave non-compliant statements of advice to clients and failed to provide additional disclosure regarding the costs and benefits lost as a result of switching from one product to another

Anderson was found to have failed in the compliance of such duties when she was advising her clients to invest in the IIOF as well as when she advised the establishment and investment in or through a self-managed super fund.

The AAT also accepted the submissions by ASIC stating that Anderson worked independently from the obligations that was owed by her licensee and that her actions were not excused or explained by the reliance on instruction, procedures, or process of her former licensee.

The AAT also accepted the submission that stated that if Anderson had acted according to her obligations as an advisor, none of her clients would have invested in the IIOF and would not have been affected by its eventual collapse.

Anderson has 28 days to appeal the AAT’s decision to the Federal Court.