The majority of client claims against a banned financial adviser fromThe Salisbury Group have been resolved however the matter has been a costly exercise for the adviser's parent company, Australian Financial Services (AFS) Group said.
ASIC released details on Wednesday of the criminal charges faced by Gold Coast-based Ian Weaver, an authorised representative of Enhance Capital Pty Ltd and The Salisbury Group. The Salisbury Group is owned by AFS Group.
Weaver's clients were all subject to professional indemnity (PI) claims after "receiving advice without reasonable basis and false and misleading statements", the ASIC announcement said.
AFS Group managing director Peter Daly told InvestorDaily, the incident in regard to PI had hit the group harshly.
"From a PI perspective, the effect was devastating and obviously nobody wants to see a client disadvantaged," Daly said.
"The matters that were raised date back to between 2003 and 2007. ASF acquired The Salisbury Group in late 2007 so unfortunately a lot of these issues were [before] our time."
AFS Group head of compliance Michael Butler said all claims have been resolved with the exception of two cases.
"It's been dealt with through external dispute resolution and it's been certainly costly to the group," Butler said.
Weaver had not given advice since 2007 and was banned as an authorised representative in 2011 for a period of five years, he said.
Butler said Weaver's clients were given the opportunity to have a different adviser assigned to them or they could seek new advisers.
"It's disappointing [but] it was a one-off," he said.
"Regarding the actions of Weaver, there was nobody else in The Salisbury Group that was operating in that manner and there was nothing of a specific nature that needed to be addressed with the rest of the group."
On 13 March, Weaver appeared at Southport Magistrates Court charged with 12 counts of failing to have a reasonable basis for the advice he gave and seven counts of making a false or misleading statement.
Weaver was not required to enter a plea and has been released on conditional bail.
The Commonwealth Director of Public Prosecutions is prosecuting the matter.
