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Adviser banned for churning

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Financial adviser Peter Jianchao Xu has been banned from the industry for five years by the Australian Securities and Investments Commission (ASIC) for policy churning.

A surveillance of Mr Xu found he was repeatedly recommending clients take out new life insurance policies instead of exploring if it would be better for them to modify their existing one.

He also failed to consider his clients’ personal circumstances when providing personal advice, and as a result he is likely to have exposed his clients to the risk of being underinsured, ASIC says.

He failed to comply with the best interests’ duty and the requirement to provide appropriate advice, ASIC says.

Mr Xu has been an authorised representative of Westpac, Commonwealth Financial Planning and Neo Financial Solutions.

To date, 62 advisers and three directors have been banned from the financial services industry, with four bans being appealed.