ASIC has banned Mr Ian John Weaver of Clear Island Waters, Queensland, from providing financial services for five years.
Following an investigation, ASIC found that Mr Weaver had breached provisions of the Corporations Act 2001 (the Corporations Act) by providing financial advice to certain clients between September 2004 and March 2007 without:
having a reasonable basis for the advice,
providing Statements of Advice that complied with the requirements under the Corporations Act, and
disclosing relevant benefits (including commissions) to his clients.
Mr Weaver was also found to have made false and misleading statements and to have engaged in misleading and deceptive conduct in the course of providing his advice.
As an authorised representative of Enhance Capital Pty Ltd between January and December 2004 and The Salisbury Group Pty Ltd (TSG) from December 2004 to June 2010, Mr Weaver arranged margin loans on behalf of certain clients and provided ‘placement advice’ in relation to the funds (which included the proceeds from the margin loans and the clients’ own funds).
As a part of that advice, Mr Weaver recommended placement of the funds into an account that provided an investor directed portfolio service (IDPS) and recommended certain asset allocations (across a number of sectors and with a variety of managed funds).
ASIC’s delegate found:
The account with features of an IDPS was a financial product under the Act, i.e. it was a facility through which a person makes a financial investment.
The clients’ investment in the various managed funds was an interest in a registered managed investment scheme and thereby also a regulated financial product.
Mr Weaver provided both financial product advice and personal advice to the clients.
The clients were retail clients under the Corporations Act.
This latest decision by ASIC is consistent with its focus on ‘quality of advice’ as an area of compliance that will be targeted by the Commission in 2011.
Mr Weaver has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC’s decision.
Editor's note: Mr Weaver applied to the Administrative Appeals Tribunal for a review of ASIC's banning decision. On 18 October 2011, the Administrative Appeals Tribunal dismissed the application for review following a request by Mr Weaver that it to be withdrawn.