The Australian regulator has permanently banned a former wealth manager from providing financial services.

The Australian Securities and Investments Commission (ASIC) found that Andrew Peter Panayiotides failed to act in the best interests of clients and provided advice to clients of Morgan Stanley Wealth Management in relation to exchange traded options (ETOs) that was inappropriate when considering the financial circumstances and objectives of the clients involved.

Panayiotides' conduct resulted in each of the client's superannuation accounts being significantly exposed to short cash covered ETO positions that were contrary to the risk profile declarations provided by the clients.

ASIC also found that Panayiotides knew, or ought reasonably to have known, that there was a conflict of interest between the financial benefit he received, in the form of brokerage, from the numerous ETO transactions he advised clients to enter into and his clients' best interests, and that he failed to give priority to his clients' interests.

Not of Good Character

ASIC further found that Mr Panayiotides improperly made payments into clients' bank accounts using his own funds, issued a false invoice, provided unethical advice to a client in relation to a superannuation fund withdrawal and entered into a personal loan arrangement with a client in return for offering reduced brokerage while at another firm.

In considering Panayiotides' conduct, which was not of an isolated nature, was not inadvertent and occurred over a long period of time in which clients incurred significant losses, ASIC had reason to believe that Panayiotides was likely to contravene a financial services law in the future and was not of good fame or character.

«Financial advisers are expected to act in the best interests of clients. ASIC will ensure appropriate enforcement action is taken against advisers who fail in this duty,» said Cathie Armour, ASIC Commissioner. 

The former adviser has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC's decision.

Monitoring Wealth Industry

The Australian Securities and Investments Commission recently said it will be focusing on the enforcement activities of its Wealth Management Project in the coming months.

ASIC's campaign is targetted at improving the standards of advice and remediation in financial services in Australia.