The Australian Securities and Investments Commission (ASIC) has banned a former Professional Investment Services (PIS) authorised representative for three years.

In a statement, the regulator said Alec Khoo, of Adelaide, South Australia, had failed to comply with financial services laws while providing financial advice to clients of his business, known as Alec Khoo and Associates.

The ban follows an extensive investigation by ASIC and Khoo is believed to be reviewing ASIC’s written reasons for the ban and considering a formal appeal.

Cultural change

PIS chief executive Peter Walther said while the ban was regrettable, the company was not surprised by the decision.

He said Khoo had been part of the PIS network for more than 10 years but had been suspended from the company in July this year following an internal investigation.

“Professional Investment Services conducted its own thorough investigation to ensure risks to retail clients were kept to a minimum and we fully cooperated with ASIC through the course of its investigation,” he said.

Walther added that owners Centrepoint Alliance Limited (CAF) bought PIS in December 2010 and he was appointed CEO eight months later.

Since CAF’s involvement, a new board and executive management team had been appointed and all prior decision-makers were no longer with the company.

“While issues such as those identified in our investigation into Mr Khoo are legacy issues that continue to exist across the industry, our company is taking steps to minimise these types of risks in the future,” he said.

“Professional Investment Services has invested heavily to achieve cultural change within the business and its network and to improve efficacy of the firm’s systems and processes in order to honour its commitment to ensure the consistent delivery of appropriate advice to retail consumers.

“The changes have been supported by a significant investment in key staff and education.”

The charges against Khoo

ASIC found that Khoo failed to have a reasonable basis for advice that clients borrow funds through a margin lending facility and invest a substantial portion of those funds in cash investments for up to three years.