ASIC has permanently banned a financial adviser who worked at some of Australia's leading wealth management groups for unethical conduct.
Muneer Mahmood Khan, also known under the alias Ivan Khan, was found to have appropriated $185,000 from an elderly client while he was working under the Westpac banner. He did not disclose that he was no longer actually employed by Westpac.
Khan argued part of this money had been loaned to him and the rest was a gift from the client; it was to be used in launching his own financial advice business.
ASIC said Khan did not ensure his client had obtained independent advice with regards to the "loan" or the "gift" and the money was largely spent on personal expenses. ASIC added that none of the $185,000 was used to establish a business.
Long term Bond Investors Shouldn't Fear Rate Rises
The regulator said the appropriation of funds left Khan's client in "a financially perilous position." The client made requests for repayment but was only refunded $10,270 of the balance.
In addition to his stint at Westpac (2006 to 2012), Khan was also a financial planner at YBR from 2013 to 2014 and NAB from 2015 to 2017. This does not suggest Khan engaged in unethical conduct at these firms.
Khan's ban will be recorded on ASIC's Financial Advisers Register. He has appealed to the Administrative Appeals Tribunal for a review and stay of the regulator's decision.
Last week, ASIC said the conduct of financial advisers and their licensees will be a key focus over the next six months.
Releasing its latest enforcement report, the regulator said it will be paying particular attention to financial advisers' compliance with the best interests' duty and their obligation to provide appropriate advice to clients.
In line with Report 499 on fees for no service, ASIC will also be taking action on those failing to deliver ongoing advice services to financial advice customers paying for such services.
The watchdog outlined that instances in which licensees claiming to provide only general advice to retail clients while selling financial products but are actually providing personal advice will also be further scrutinized.