ASIC has permanently banned Mr Rommel Panganiban, of Bella Vista, New South Wales, from providing financial services after an ASIC surveillance found that he failed to act in his clients' best interests or have a reasonable basis for advice, and that he had prioritised his own interests over that of his clients.
Mr Panganiban was an authorised representative of AMP Financial Planning Pty Ltd between 19 March 2010 and 12 September 2014.
Between 4 February 2011 and 31 July 2014, Mr Panganiban advised 49 clients who held risk insurance through their AMP superannuation fund to cease their existing AMP insurance policies and replace them with new AMP insurance policies. He did this without considering whether this was in the best interests of his clients and without advising his clients that he was able to simply transfer the insurance policies.
By ceasing and replacing the insurance policies, rather than transferring them, the full rate of commission became payable to AMP Financial Planning Pty Ltd. Mr Panganiban's remuneration was positively influenced by the upfront commissions he generated as a result of his advice.
As a result of replacing rather than transferring the clients' policies, Mr Panganiban's clients were exposed to unnecessary consequences including gaps in cover and changes in definitions and policy terms and they risked policy exclusions and loadings. It also unnecessarily restarted the non-disclosure period that allows insurers to avoid policies within the first three years of inception for inadvertent non-disclosure.
The repetitive nature of Mr Panganiban's conduct, against the best interests of his clients and motivated by greed, led to a finding by ASIC that Mr Panganiban was not of good fame and character.
AMP Financial Planning Pty Ltd alerted ASIC to Mr Panganiban's behaviour on 3 October 2014, and has written to his clients offering to review their advice.
Mr Panganiban was a representative of Lionsgate Financial Group Pty Ltd from 29 September 2014 until 3 August 2016. ASIC will require both AMP Financial Planning Pty Ltd and Lionsgate Financial Group Pty Ltd to notify Mr Panganiban's clients of his banning.
Mr Panganiban has appealed to the Administrative Appeals Tribunal (AAT) for a review of ASIC's decision.
Background
After the ASIC Delegate conducted the hearing of this matter pursuant to the Hearing Notice, Mr Panganiban filed an application in the Federal Court seeking orders that ASIC provide him with additional material (namely, client files) and that ASIC be restrained from making a decision in relation to the Hearing Notice. In his application, Mr Panganiban claimed that by failing to provide him with the client files, ASIC had denied him procedural fairness.
Mr Panganiban's application was heard on 21 April 2016. On 13 May 2016, his Honour Justice Bromwich delivered his judgment, in which he dismissed the application and awarded costs to ASIC.
In his judgment, his Honour Justice Bromwich confirmed that it is for ASIC to determine the matters and material on which it proposes to rely in making a banning decision, and that it is those matters and material which the rules of natural justice require to be disclosed to the banning candidate (refer: 16-160MR)
On 9 September 2016, an application in the AAT by Mr Panganiban for a stay of the ASIC Delegate's decision and confidentiality orders was dismissed. Mr Panganiban's appeal to the AAT for review of ASIC's decision will be heard on a date to be fixed.
Wealth Management Project
This outcome is a result of ASIC's Wealth Management Project. The Wealth Management Project was established in October 2014 with the objective of lifting standards by major financial advice providers. The Wealth Management Project focuses on the conduct of the largest financial advice firms (NAB, Westpac, CBA, ANZ, AMP and Macquarie).
ASIC's work in the Wealth Management Project covers a number of areas including:
- Working with the largest financial advice firms to address the identification and remediation of non-compliant advice;
- Seeking regulatory outcomes when appropriate against Licensees and advisers.
As part of its Wealth Management Project, ASIC has banned the following advisers from the financial services industry, in addition to Mr Panganiban:
- Anthony Jason Sourris (16-270MR)
- Sarah Kate Gardner (16-269MR)
- Nicholas Kerr (16-260MR)
- Craig Scott Miller (16-239MR)
- Wayne Meadth (16-188MR)
- Hardik Bhimani (refer: 16-124MR)
- Gerard McCormack (overturned on appeal: 16-448MR)
- Shane Thompson (refer:16-022MR)
- Ben Rickman (refer:16-006MR)
- Ben Cheung (refer: 16-004MR)
- Mark Tidbury (refer: 15-383MR)
- Amanda Ritchie (refer: 15-294MR)
- Stuart Murray Jamieson (refer:15-288MR)
- Sharnie Kent (refer: 15-286MR)
- Alfie Chong (refer: 15-259MR)
- Martin Hodgetts (refer: 15-218MR)
- Shawn Hickman (refer: 15-213MR)
- Brett O'Malley (refer: 15-121MR)
- Brian Farber (refer: 15-178MR), and
- Rebecca Locksley (refer: 15-070MR).