Advisers reprimanded over fee-for-no-service conduct

The Financial Services and Credit Panel (FSCP) has issued three determinations in the month of April, including a reprimand to a financial adviser who continued to collect fees from a client for over a year after the service agreement ended.

The adviser was handed a reprimand for charging a client ongoing financial advice fees without providing the services paid for during and after the end of the agreement, the FSCP said. The charging continued for 17 months and occurred unknowingly due to an "administrative error".

Although it was an isolated case, the FSCP determined the adviser should have systems and governance procedures in place to prevent and detect the error.

The client continued to be charged until they made a complaint to the adviser's licensee.

As a result, the panel said the relevant provider contravened s921E(3) of the Corporations Act 2001, and the Code of Ethics 's values of trustworthiness and diligence and breached Standards 2 and 7.

In a separate determination, an adviser was directed to complete at least six hours of continuing professional education, covering professionalism and ethics and within 30 days, after finding he failed to provide services for which fees were charged.

The FSCP said the single instance represented an isolated case of human error and that the adviser has taken appropriate steps to avoid recurrence of such misconduct.

The panel believed the adviser contravened s921E(3) of the Corporations Act 2001 and the Code of Ethics' values of trustworthiness and diligence and breached Standards 2 and 7.

Further, the panel decided not to take any action against a third adviser, who purportedly charged two clients (a husband and wife) monthly advice fees without providing services.

"The Sitting Panel considered submissions from the relevant provider and decided to not take any action," it said.

Last month, an adviser received a reprimand for providing poor advice to a client to roll their super over to another product, costing them their insurance coverage.