A former insurance adviser in Gosford, NSW, has been hit with a three-year ban for instructing clients to deposit money meant for their insurance premiums into his personal account and misusing the money. 

John Durant, who was an authorised representative (AR) of Insurance Advisernet, engaged in the misconduct from July 30 2019 to February 12 2021, the Australian Securities and Investments Commission (ASIC) said in a statement today. 

ASIC says his clients were also told to transfer money intended for their insurance policies into the business account of Assurance Corp, where he was the sole director. Assurance Corp is also an Insurance Advisernet AR. 

The regulator says he was required by law to have his customers’ money deposited into Insurance Advisernet’s client monies account. After the funds were paid to his personal or Assurance Corp’s accounts he failed to transfer the money to Insurance Advisernet.

ASIC confirmed that the total amount involved was less than $50,000.

"ASIC’s investigation found that a total of $29,260.71 was deposited by clients into Mr Durant’s personal account and a total of $13,149.49 was deposited by clients into Assurance Corp’s business account," the regulator said.

Under the three-year ban order, he is not allowed to provide financial services, control an entity that carries on a financial services business, or perform as an officer any function involved in the carrying on of a financial services business. 

“ASIC found that although Mr Durant’s misconduct was a result of poor judgment rather than an act of dishonesty, a banning order was justified given the potential for such conduct to harm clients,” the regulator said. 

He has the right to apply to the Administrative Appeals Tribunal for a review of ASIC’s decision.

Insurance Advisernet MD Shaun Standfield told insuranceNEWS.com.au that the company’s compliance systems first identified a problem in February 2021. Mr Durant was suspended immediately and terminated as an AR two months later. 

“We notified ASIC a week after we became aware of it,” Mr Standfield said. 

“John was honest about what had happened, and it was not systemic over that period, there were only a few instances. But it’s not about the amount of money, it’s a breach of trust and we have a reputation to protect. 

“This is the first time something like this has happened in my eight years at Insurance Advisernet and it is a testament to the processes that we have in our system that it was picked up."