8 warning signs of a dodgy financial adviser

As the regulator of the financial services industry in Australia, ASIC maintains a register of advisers licensed to provide advice on investments, superannuation and life insurance. You should always check the ASIC register before hiring the services of a financial adviser to ensure they are licensed.

However, an ASIC licence is issued at a point in time and doesn’t guarantee the quality of an adviser’s services. Even if a financial adviser is licensed, it’s important to be aware of potential warning signs that their services may not be high quality or that they could even be unethical.

ASIC Banned and Disqualified Persons Register

ASIC has the power to ban or fine financial advisers based on their conduct. It also maintains a ‘Banned and Disqualified Persons’ register that provides information about people who have been disqualified from practising in the financial services industry.

Here are some common warning signs and tips for how to avoid a bad financial adviser. There is a lot of overlap, with bad eggs often engaging in several of these practices at once.

Warning sign 1: Cold calling, high-pressure sales tactics

ASIC is warning people about high-pressure cold-calling and promises of unrealistic returns, encouraging them to switch their super into risky investments.

Also of concern are offers of free superannuation ‘health checks’ and prizes, often via social media advertisements and websites.

This follows the $1.2 billion collapse of the Shield Master Trust, First Guardian Investment and Australian Fiduciaries schemes. Shield and First Guardian were available on super investment platforms administered by reputable names including Macquarie and Equity Trustees.

Investigations into the matters are ongoing, but in July 2025, ASIC banned four advisers connected to Shield and cancelled the licence of another firm connected to First Guardian.

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The three schemes controlled almost $1.2 billion in retirement savings and promised unrealistic returns well above market rates. While the government’s Compensation Scheme of Last Resort will likely compensate some of the more than 12,000 victims, payouts are capped at $150,000, which will only partially cover some individuals’ losses.

When it comes to sales calls about super switching, ASIC deputy chair Sarah Court said one of the red flags is being asked to make a quick decision. Other red flags are engagement, which mostly takes place over the phone with limited client contact with a financial adviser, poor or no product disclosure and the involvement of unlicensed people in the advice process.

Warning sign 2: An ‘adviser’ not being licensed to give financial advice

This is a classic warning sign and should have set off alarm bells in the notorious case of Melissa Caddick.

Ms Caddick fraudulently claimed to be a financial adviser, but it is alleged she and her company, Maliver, provided financial services without an Australian Financial Services Licence (AFSL) and that she used the licence of another company without authorisation.

An ASIC investigation found her investors, many of them family and friends, had lost between $20 million and $30 million between 2013 and 2020. 

Ms Caddick disappeared in November 2020 after Australian Federal Police raided her Sydney home on behalf of ASIC, which had frozen her bank accounts and ordered her to hand over her passport. In May 2023, a coronial inquest found she was dead, but the date and cause of death remained uncertain.

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A search of ASIC’s Financial Advisers Register while she was active would have shown no results for Ms Caddick or her company, Maliver. A search of the AFSL she was using would have shown it was held by another company unrelated to Ms Caddick.

Warning sign 3: A financial adviser asking you to pay investment money directly into their account

Despite the widespread publicity surrounding the Melissa Caddick case, the practice of falsely claiming to be a licensed financial adviser is still far too common. This is often a precursor to advising new clients to deposit money into fraudulent and/or personal bank accounts.

In July 2025, ASIC permanently banned Matthew Beresford from engaging in financial services and credit activities, but only after investors had deposited around $374,000 into his accounts.

Using a false identity and fraudulent bank accounts, he had illegally offered financial advice and financial services, falsely claiming his company representatives held an AFSL.

In 2024, Beresford was sentenced to 85 days’ imprisonment and a 30-month Community Corrections order after pleading guilty in the County Court of Victoria to false document and proceeds of crime offences.

Warning sign 4: An adviser operating under multiple company names

A former Sydney financial adviser was banned by ASIC after it was found he had operated a financial services business under 14 separate companies. The adviser was a failed director of all the companies. They had all been placed into liquidation over a 13-month period and the combined debt owed to creditors was $9.8 million.

The adviser was subsequently banned by ASIC from holding a financial services licence for five years.

Warning sign 5: An adviser failing to act in your best interests

Financial advisers are legally obliged to provide advice that is in the best interests of their clients, rather than in their own best interests. But some don’t.

In 2025, ASIC banned Brisbane financial adviser and director of Lighthouse Partners, Kiriley Roper, for ten years. Lighthouse charged fees for no service in relation to 14 clients and failed to refund them $81,652 plus interest. It found Roper was aware of the conduct, failed to report it immediately and had enriched herself at the expense of the affected clients. Lighthouse Partners was an authorised representative of Crown Wealth Group. ASIC cancelled Crown’s AFSL in 2024 after it was placed in voluntary administration and banned its head of compliance, Andrew Moore, for three years.

Previously:

• Six of Australia’s largest financial institutions – AMP, ANZ, CBA, Macquarie, NAB and Westpac – paid or offered a total $4.7 billion in compensation to customers who suffered loss or detriment because of fees for no service or non-compliant advice. This followed eight years of ASIC investigations into conduct that was not in the best interests of clients.
• The Federal Court ordered AMP to pay a $24 million penalty for charging life insurance premiums and advice fees from the super accounts of more than 2,000 deceased clients. This was despite being notified these customers had died.
• A Brisbane financial adviser was banned for five years for failing to act in the best interests of his clients when he recommended that they roll over their existing super to a newly established self-managed super fund (SMSF) and borrow to invest in residential property. ASIC found his business structure – which included companies providing services in property sales, mortgage broking, accounting and financial advice – created conflicts of interest, conflicted remuneration and prioritised his interests over those of his clients. He also gave clients misleading statements of advice.

Warning sign 6: An adviser using your funds without your authorisation

Unfortunately, this does happen.

• A former NSW financial adviser was sentenced to six years’ imprisonment with a non-parole period of four years for misappropriating $1.9 million of client funds. The adviser was found to be operating a type of Ponzi scheme, where clients were advised to invest in a company of which he was director, on the basis that it would invest the money. Some of the funds were used to pay dividends while the adviser used the rest for his own benefit.
• A Perth financial adviser was permanently banned for making unauthorised transactions on the trading accounts of clients and forging their signatures on investment instruction documents with an online trading platform. The banning followed the adviser’s conviction for providing financial services without proper authorisation.
• A former Townsville financial adviser was sentenced to eight years’ imprisonment with a non-parole period of two years for misappropriating clients’ funds for his own use over more than ten years. It was found that he transferred around $1.1 million from his clients’ super, pension and personal savings accounts to fund his own lifestyle.

Warning sign 7: An adviser recommending products without appropriate qualifications or registrations

• A Hobart financial adviser was banned for five years after providing advice that he was not trained to give and that was not in the best interests of his clients. It was found that he provided clients with inappropriate advice to double gear their investments, without regard to their personal circumstances, their cash flow position or their ability to cover margin calls.
• In a sign of the times, the Federal Court prohibited a social media ‘finfluencer’ from carrying on a financial services business without an AFSL. He is permanently prohibited from hosting online groups for which a membership fee is charged and where recommendations were made about share trades. ASIC commented that people who bought shares on his recommendation did not have the protection of financial services laws.

Despite a drop in social media posts, spruiking financial products and services by unauthorised finfluencers since 2022, when ASIC issued INFO Sheet 269, Discussing financial products and services online, the sector is still a cause for concern.

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In June 2025, ASIC announced it had issued warning notices to 18 finfluencers suspected of unlawfully promoting high-risk financial products and providing unlicensed financial advice to Australians.

ASIC’s current concerns lie with finfluencers positioning themselves as so-called trading experts, who are providing unauthorised financial product advice and promoting high-risk, complex investment products.

If a finfluencer is not licensed, an authorised representative or exempt, they’re legally not permitted to carry on a business of providing investment advice in Australia.

Investors and consumers can check the credentials of finfluencers by using ASIC’s professional registers search tool.

Warning sign 8: An adviser trading in investments when unauthorised to do so

In a high-profile case, ASIC permanently banned former financial adviser Kristofer Ridgway due to concerns he was not a fit and proper person to provide financial services.

While working for Shaw and Partners stockbrokers, without their knowledge, he promoted international unlisted shares to clients that were not on the firm’s authorised list. Among a host of misdeeds, ASIC found he made false statements to clients to encourage them to buy shares, while failing to disclose trading profits and commission payments he received.

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The bottom line

It’s crucial to check the ASIC Financial Adviser Register before you choose an investment adviser. If their name doesn’t appear, check ASIC’s banned and disqualified register. It’s also important to look out for potential warning signs on an ongoing basis to ensure that your financial adviser is always acting in your best interests.