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AAT affirms SMSF adviser ban

The Administrative Appeals Tribunal (AAT) has upheld a ban imposed by ASIC on an SMSF adviser who failed to disclose significant conflicts of interest.

In December 2019, Wayne Blazejczyk was banned by the regulator for five years after he was found to have failed to act in the best interests of clients by recommending they establish self-managed super funds despite having low balances and the ongoing costs being greater than those of their existing funds.

He was also found to have failed to disclose a conflict of interest, having recommended clients invest in a fund that he was the investment manager of while also the beneficiary of the SMSF administration service provider he recommended they engage.

While he did not contest ASIC's findings that he had broken financial services law and conceded a five-year ban was appropriate, Blazejczyk appealed to the AAT believing he should only be prohibited from providing personal advice to retail clients.

The AAT was not satisfied a limited banning order as proposed by Blazejczyk would provide "sufficient general deterrence", nor that it would promote consumer confidence and professionalism in the financial services industry.

In its decision, the AAT said: "...acting in the best interests of clients and giving priority to their interests, which Mr Blazejczyk admits he failed to do, are directly relevant to activities that would be permitted under his proposed order."

"So too is careful attention to requirements for disclosure of remuneration and other personal interests, which Mr Blazejczyk also failed to do."

Further, the AAT was not satisfied that a permissive banning order allowing Blazejczyk to engage in specific financial services activities would be "adequate to promote the protective objectives of the licensing regime".

Prior to his banning, Blazejczyk was an authorised representative of Ballast Financial Management. He is also responsible manager, director and owner of the company, and was also owner of Bateau Asset Management.

ASIC suspended Ballast's AFSL in October until December 18 as it had ceased to carry on a financial services business.

In 2015 another former authorised representative of Ballast, Marion Joan Pearson, was permanently banned from providing financial advice after she was found to have falsified documents to hide the fact client money was being paid into her own business' bank account and misled Ballast and clients into believing investments had been made on behalf of clients when they had not.

Read more: AATASICAdministrative Appeals TribunalWayne BlazejczykBallast Financial ManagementBateau Asset ManagementMarion Joan Pearson
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