ASIC has permanently banned Victorian man, Andrew Moroney, from providing financial services after it was found that he operated a business model of providing advice that prioritised his own interests ahead of his clients.

In executing this business model, ASIC found that Mr Moroney failed to comply with financial services laws in relation to a number of his clients.

Mr Moroney was an Authorised Representative of Guardian Advice from 20 March 2006 to 3 April 2014.

Mr Moroney's business model for his advice practice involved annually recommending his clients replace one insurance policy with another. This meant Mr Moroney received a high up-front commission payment each year for each replaced insurance policy. Clients who entered into a new life insurance policy annually were put at risk of exclusionary periods or revised terms.

ASIC decided to ban Mr Moroney permanently after finding that he:

• failed to make reasonable enquiries into the circumstances of the clients before providing advice to them to enter into a new life insurance policy;
• failed to conduct reasonable enquiries into insurance policies, both those already held by clients and alternative policies;
• incorrectly stated he had undertaken research on alternative life insurance policies, when this was not done;
• failed to demonstrate that the advice he provided to the clients was appropriate and in the best interests of the clients, based on their circumstances; and
• prioritised his own commercial interests ahead of the interests of the clients.

ASIC Deputy Chairman Peter Kell said, 'Conduct by advisers aimed at maximising commission by replacing insurance policies, without valid reason, is unacceptable. It puts clients' coverage at risk and drives costs in the sector, which are ultimately borne by consumers. ASIC will remove advisers whose conduct breaches financial services laws and falls short of the standards expected of the industry'.

Mr Moroney has the right to apply to the Administrative Appeals Tribunal for a review of ASIC's decision.

Background

Outcomes following ASIC’s review of life insurance advice include:

• in January 2016, ASIC accepted an enforceable undertaking from Clearview Financial Advice Pty Ltd representative, Jason Churchill (refer:16-008MR);
• in September 2015, ASIC banned life insurance financial adviser and former authorised representative Lukas Zelka of Neo Financial Solutions Pty Ltd from providing financial services for three years (refer: 15-269MR);
• in July 2015, ASIC banned life insurance financial adviser Brian Farber from providing financial services for four years (refer: 15-178MR);
• in January 2015, ASIC imposed conditions on the Australian financial services (AFS) licence of Suncorp-owned Guardian Advice (refer: 15-003MR).