ASIC has banned Queensland financial adviser James Cribb from providing financial services for four years and suspended his Australian financial services (AFS) licence, held by Mode AFSL Pty Ltd (Mode), for 10 weeks.

ASIC found that Mr Cribb failed to act in his clients' best interests when providing advice on self managed superannuation funds (SMSF). ASIC found that Mr Cribb prioritsied his own interests over those of his clients by providing advice that was likely to benefit other entities related to him, including an SMSF administration business for which he was the sole director and a shareholder.

Specifically, ASIC found that Mr Cribb had failed to:

• investigate the individual circumstances of his clients;
• adequately investigate alternative strategies and products that may have been suitable for his clients' objectives; and
• prioritise his clients’ interests over his own.

Mr Cribb’s advice failures were identified in ASIC’s recent review of SMSF advice (18-192MR).

ASIC has also suspended Mode’s AFS licence after ASIC found that Mode did not take reasonable steps to ensure that its representatives complied with financial services laws. As well as being an authorised representative, Mr Cribb was the sole keyperson and responsible manager of Mode since 20 July 2017. Mode’s AFS licence will be suspended for a period of 10 weeks from 10 July 2018 or until it obtains approval for a replacement key person and responsible manager from ASIC.

Mr Cribb's banning will be recorded on ASIC's Financial Advisers Register. 　

ASIC's MoneySmart website has useful information for clients of advisers to help them understand what to do if their adviser has been banned.　

Mr Cribb and Mode have the right to appeal to the Administrative Appeals Tribunal for a review of ASIC's decision.

Mr Cribb was also an authorised representative of Axis Investment Centre Pty Ltd (Axis) from 9 August 2010 to 14 August 2017.

Background

In 2017, ASIC undertook a large research project into SMSFs including testing whether advice providers were complying with the law when providing personal advice to retail clients to set up an SMSF. Last month, ASIC released two reports on its findings, Report 575 and Report 576 (18-192MR).

Mr Cribb’s conduct was identified by this project as he had a number of client files included in the representative sample. These client files related to advice Mr Cribb provided whilst he was an authorised representative of Axis. ASIC subsequently commenced a targeted surveillance on Mr Cribb to test a larger sample of advice he had provided whilst he was an authorised representative of Axis and Mode.

Under the Corporations Act, ASIC has the power to suspend or cancel an AFS licence where the licensee has not complied with their obligations under 912A.