The Administrative Appeals Tribunal (AAT) has affirmed ASIC’s decision to ban Ms Pamela Anderson, a Victorian financial adviser, from providing financial services for a period of two years.
During the period of the misconduct, Ms Anderson was authorised by Australian financial services licensee The Financiallink Group Pty Ltd (Financiallink), now Nextgen Financial Group Pty Ltd. Ms Anderson provided personal advice to retail clients through her practice, Anderson Lutgens & Co Pty Ltd trading as Beyond iWealth.
ASIC found that Ms Anderson recommended that some of her clients invest in high-risk fund, the Investport Income Opportunity Fund (IIOF). IIOF was operated by an entity related to Ms Anderson’s former licensee, Financiallink.
The AAT affirmed ASIC’s decision which also prohibited Ms Anderson from managing, supervising or auditing the provision of financial services, and the provision of training about financial services or financial products until the conclusion of the ban. The AAT affirmed ASIC’s findings that Ms Anderson:
- failed to act in the best interests of her clients, and to provide appropriate advice by not taking into consideration her clients’ preferences for ethical investments;
- failed to prioritise her clients’ interests by advising them to invest in IIOF in circumstances where the applicant knew, or ought to have known, that there was a conflict between the interests of the clients and her own interests as the recipient of loans from IIOF;
- gave non-compliant statements of advice to clients and failed to provide additional disclosure regarding the costs and benefits lost as a result of switching from one product to another.
The AAT found that Ms Anderson failed to comply with these duties when giving advice to other clients to invest in the IIOF and when providing advice to establish and invest in or through a self-managed super fund.
The AAT accepted ASIC’s submissions that Ms Anderson was under independent and distinct obligations than those owed by her licensee to comply with her professional obligations and that her conduct was not excused or explained away by a reliance on the instructions, procedures, or process of her then licensee. Further, the AAT accepted ASIC’s submission that had Ms Anderson acted consistently with her obligations as an advisor, virtually none of her clients would ever have been advised to invest in the IIOF, or have invested in it, and they would not have been affected by the collapse of the IIOF.
Ms Anderson has 28 days to appeal the AAT’s decision to the Federal Court.
Background
Ms Anderson was an authorised representative of:
- Financiallink between July 2013 and September 2013, and between March 2016 and September 2018;
- Boston Reed Pty Ltd between September and November 2018;
- Ballast Financial Management Pty Ltd between November 2018 and April 2020;
- AD Advisory Services Pty Ltd between April 2020 and August 2021 and during a stay period between July 2022 and November 2023 (the date of the AAT’s decision).
Most recently, Ms Anderson provided personal advice to retail clients through her practice, Addicott Partners Pty Ltd.
Financiallink is a related entity of Linchpin Capital Group Ltd (Linchpin) and Beacon Financial Group Pty Ltd. Other related entities include Endeavour Securities (Australia) Limited (Endeavour) and Investport Pty Ltd (deregistered 19 December 2019). Relevantly, Linchpin was the trustee of the IIOF (ARSN 121 875 009), a managed investment scheme operated by Endeavour.
If any financial advice clients have concerns about the advice they have received, they should lodge a complaint with the AFS licensee in the first instance. If a client is dissatisfied with the AFS licensee’s response to their complaint, they can lodge a complaint with the Australian Financial Complaints Authority (AFCA).
ASIC’s Moneysmart website has useful information for consumers whose advisers have been banned.
Matter background
- 19-065MR Endeavour and Linchpin placed into liquidation after ASIC court action
- 20-122MR ASIC bans three directors of Linchpin and Endeavour
- 21-290MR ASIC bans QLD-based adviser Keith McDermott for three years
- 22-167MR ASIC bans Melbourne based adviser David Ruthenberg for three years
- 23-089MR Federal Court finds current and former officers of Linchpin and Endeavour breached duties