Friday 30 June 2006 06 – LAWFUEL – Press Release Service – The Austr…

Friday 30 June 2006 06 – LAWFUEL – Press Release Service – The Australian Securities and Investments Commission (ASIC) has obtained orders in the Federal Court about superannuation switching advice provided by former AMP financial adviser, Mr John Vafiadis of Hobart. The court made declarations that Mr Vafiadis had breached the law by giving inappropriate advice, by not comparing the clients’ existing super fund with the recommended fund and by not disclosing the disadvantages of switching funds to an AMP fund. The court orders relate to financial advice Mr Vafiadis gave to five clients. The clients were advised to switch their superannuation from Tasplan to AMP Flexible Lifetime Super. Four of these clients also received advice on life and disability insurance. At the time of providing the advice, Mr Vafiadis was an authorised representative of AMP Financial Planning Pty Ltd. Mr Vafiadis is no longer an authorised representative of AMP or any other licensee. ‘It is very important that financial advisers make appropriate superannuation recommendations and give their clients sufficient information to make an informed decision. ASIC’s Executive Director of Enforcement, Ms Jan Redfern said. ‘This case highlights the legal obligations of the individual adviser, in addition to the separate obligations of the adviser’s licensee, in this case being AMP.’ The detailed court orders include declarations that Mr Vafiadis also: • did not disclose full information about the costs, lost benefits and other significant consequences of the recommended switch; • did not compare the projected returns, benefits and costs of continued membership of Tasplan with those of AMP Flexible Lifetime Super; and • gave inappropriate advice to four clients about life insurance and/or total and permanent disability insurance. The Court ordered that Mr Vafiadis cover each of the five clients for up to $1,500 so that each could get legally compliant financial advice on the issues Mr Vafiadis inappropriately advised on. The court also ordered Mr Vafiadis pay $5,000 for ASIC’s legal costs. AMP Financial Planning has confirmed that it is responsible for the conduct of Mr Vafiadis while he was its authorised representative and will compensate those clients to whom Mr Vafiadis gave advice that had no reasonable basis. Page 1 of 2
Page 2 of 2
This matter was resolved by consent with Mr Vafiadis. The cooperation of Mr Vafiadis enabled the court proceedings to be concluded without extended hearings. Background ASIC’s investigation in this case was conducted at the same time as a wider surveillance project on superannuation switching advice was commenced. ASIC’s findings on that project were released in August 2005. For further information contact: Jan Redfern Executive Director, Enforcement Telephone: 02 9911 2191 Mobile: 0411 119 210 Danielle Huck ASIC Media Unit Telephone: 03 9280 3407 Mobile: 0417 540 769

Scroll to Top