PIS adviser banned for three years
An Adelaide-based Professional Investment Services (PIS) financial adviser has been banned from providing financial services for three years.
The Australian Securities and Investments Commission (ASIC) stated that Alec Khoo was banned for failing to comply with financial services laws.
Khoo was an authorised representative of PIS, servicing clients through his business known as Alec Khoo & Associates, ASIC stated.
Khoo "failed to have a reasonable basis for advice that clients borrow funds through a margin lending facility and invest a substantial portion of those funds in cash investments for up to three years," according to ASIC.
"This advice resulted in a significant portion of the clients' investment portfolio making a loss, as the interest paid on the borrowed funds was higher than the interest earned on the cash investments," ASIC stated.
Khoo also failed to provide statements of advice to clients when required to do so, failed to include mandatory information about margin lending facilities in statements of advice, and provided a statement of advice to a client which contained information that was likely to mislead, ASIC stated.
Khoo has the right to appeal the decision at the Administrative Appeals Tribunal.
Update: PIS has released a statement saying that while the ban is "regrettable", the company had already suspended Khoo following an internal investigation and had complied with ASIC in its investigation.
PIS chief executive Peter Walther said that since PIS was purchased by Centrepoint Alliance in 2010 and he commenced his role in 2011, a new board and new executive management team were appointed and all prior decision-makers were no longer with the company.
"While issues such as those identified in our investigation into Mr Khoo are legacy issues that continue to exist across the industry, our company is taking steps to minimise these types of risks in the future," he said.
"Professional Investment Services has invested heavily to achieve cultural change within the business and its network and to improve efficacy of the firm's systems and processes in order to honour its commitment to ensure the consistent delivery of appropriate advice to retail consumers," he said.
"The changes have been supported by a significant investment in key staff and education. In addition, the risk profile of the business has changed dramatically due to a focus on quality and a corresponding consolidation of both the adviser network and the approved product list."
Walther said the company would communicate with Khoo's clients to assist them with any concerns they might have about the financial advice he had provided them.
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