ASIC has banned Queensland financial adviser Mark Alexander Rothnie for three years for failing to act in the best interests of his clients and for failing to provide appropriate advice.

ASIC’s decision to ban Mr Rothnie is a result of work ASIC undertook as part of its Life Insurance Lapse Data (LILD) Project.  Data provided to ASIC by life insurers led ASIC to further investigate a number of financial advisers, including Mr Rothnie.

ASIC’s surveillance was conducted while Mr Rothnie was an authorised representative of Australian financial services (AFS) licensee, GPS Wealth Limited.

ASIC found Mr Rothnie failed to properly investigate and document his clients’ relevant financial and personal circumstances. Mr Rothnie also failed to give adequate consideration to his clients’ existing insurance products before making a recommendation to switch them, which resulted in clients being worse off.

The banning of Mr Rothnie is part of ASIC’s ongoing efforts to improve standards across the financial services industry. It will be recorded on ASIC’s publicly available Financial Advisers Register and on the Banned and Disqualified Persons Register.

ASIC Commissioner Danielle Press said, ‘financial advisers are expected to understand their clients’ personal circumstances and take those circumstances into consideration when providing personal advice. When recommending that clients switch from an existing life insurance product, advisers must fully consider the risks of the switch and if it is necessary to meet the clients’ goals and objectives.

‘Advisers have a legal obligation to prioritise their clients’ interests and to comply with the best interests duty when providing personal advice. ASIC will continue to take action where advisers don’t comply with the law,’ Ms Press said.

ASIC's MoneySmart website has useful information for consumers whose advisers have been banned.

Background

Mr Rothnie was banned on 29 July 2019. Pending an application to appeal the banning order to the Administrative Appeals Tribunal (AAT), as well as an application for orders staying the operation of the ban and to keep the ban and the appeal against it confidential, ASIC agreed not to publicise Mr Rothnie’s banning.

On 23 October 2019, the Tribunal ordered that there should be no stay and that neither the ban nor the appeal should be confidential. The Tribunal is yet to consider Mr Rothnie’s appeal against the banning order itself.

The LILD Project was established in August 2016 to make greater use of data to focus ASIC's surveillance of life insurance advice, with the aim of improving life insurance advice provided to Australian consumers.

Under the LILD Project, ASIC collected information from life insurers that list the names of advisers who met specific thresholds relating to lapsed policies. ASIC analysed these reports and other data to identify a group of high risk advisers.

The resulting high-risk list is not in itself an assessment of poor quality advice. The list enabled ASIC to target its surveillance activity. ASIC then reviewed the quality of advice provided by advisers on the list to determine whether the advisers are acting in their clients' best interests.

Editor's note:

The hearing for Mr Rothnie’s appeal against his banning order was held from 18 to 22 January 2021. On 31 May 2021, the Administrative Appeals Tribunal affirmed ASIC’s existing order to ban Mr Rothnie from providing financial services for a period of three years.