The case of a rogue advisor moving from firm to firm, even as regulators were closing in, is highlighting a need for better communication between competitors.
An advisor from Australia made headlines in the country after allegedly being involved in a series of systemic breaches, selling complex products to his clients, according to a report from the National Australia Bank (NAB).
But that’s not all. The highly sensitive report warned, the bank was seeking an explanation for "what appeared to be 'copy and pasted' client signatures on the Authority to Act documentation.”
The advisor, Alfie Chong, was fired last June when his firm, Meritum, a subsidiary of NAB for his conduct but despite the alleged crimes, it was nowhere near the end of his career.
In August of the same year, Chong was working under the license of NEO Financial Solutions, an individual firm in Perth not aligned to one of the country’s four big banks.
The case called into the question whether firms need to be calling for a much stronger register for financial planners to allow consumers to interrogate the work history of their advisors before entrusting them with their life savings.
In Australia, there are major questions about how useful the register will be – given it will have no information about why advisors left their former firms.
According to an article in the Sydney Morning Herald, during a dramatic week, ASIC revisited its sweep of 10 institutions, including NAB's Meritum which offered complex financial advice to customers
That sweep had found that a staggering 50 per cent of files it reviewed had "insufficient evidence of compliance", including inadequate consideration of the client's needs, unsuitable gearing recommendations, misrepresentation of the products and risk and lack of transparency on fees charged. It also found instances of "boilerplate" statements of advice.
With that in mind, one must wonder if similar action is needed in Canada to combat slippery advisors who sneak out of harm’s way.