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ASIC data project identifies churning

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Queensland adviser Mark Alexander Rothnie has been banned for three years by the Australian Securities and Investments Commission (ASIC) for churning clients through insurance policies.

The surveillance was conducted while Mr Rothnie was an Authorised Representative of GPS Wealth. ASIC found he failed to adequately consider his clients’ existing insurance products before making a switching recommendation, which resulted in the clients being worse off. He also failed to properly investigate and document his clients’ relevant financial and personal circumstances.

Mr Rothnie was among a number of advisers investigated by ASIC as a result of its Life Insurance Lapse Data project, which was developed in 2016.

ASIC collected lists of advisers who met specific thresholds relating to lapsed policies from life insurers and used the lists and other data to identify a group of high-risk advisers.

Mr Rothnie was banned in July, but he appealed to the Administrative Appeals Tribunal (AAT), as well as applying to stay the operation of the ban and keep it confidential. The AAT later ordered the ban should not be stayed or kept confidential. It is yet to consider the appeal.