The Insurance Council of British Columbia has published a decision, wherein it sanctions Sherlock Hsu for witnessing a blank document and for failing to take notes or conduct client needs assessments. He was first brought to the attention of the insurance council after his client complained that he used her signature without consent on application forms and called the police.
First licensed in June 2019, Hsu’s client in April 2021 complained that he used her signature and conducted five credit checks on her in January that year – despite knowing that she was saving to purchase a property in the near future.
During a routine client call he recommended a product that could help improve her investment strategy by using loans with no change to her monthly budget. “The licensee explained that based on his discussion with the complainant the licensee recommended a leveraged investment strategy and that it was the client’s choice whether to try the product or not. The licensee described the investment strategy as a trial,” the intended decision in the case states. “The licensee had the complainant apply to various companies so the complainant could pick between the companies once approved. The licensee was unable to provide an answer as to how the initial amounts to open the investments were derived or calculated.”
When the client pointed out that the loans applied for would affect her mortgage application, he again explained the leveraging strategy, clearly, he claims, after which the complainant called the Vancouver Police Department. (Hsu then helped her cancel her contracts. He did not meet with her in person, as the events occurred during COVID-19 lockdowns.)
When he was reviewed by council, it was further found that Hsu did not keep any records about his communications with the client and that he was not in the habit of using know your client or reasons why letters. “The licensee stated that his email capacity only held 200 megabytes and he did not have the capacity to keep old emails.”
The council states that it is troubled by Hsu’s lack of systems for record keeping. “Without that information it is difficult to assess whether the licensee was selling products based on the client’s needs or based on broad concept selling, where clients are encouraged to try products they may not necessarily need or may not be suitable for their stated objectives and circumstances.”
Council further questioned whether the leveraged strategy was suitable for a client who was trying to purchase a home and who was concerned about her credit. “Council concluded that the licensee failed to maintain proper books and records, which in turn raised questions of the licensee’s competence.”
The council has in turn fined Hsu $2,000, assessed investigation costs in the amount of $2,437.50 and has ordered the inactive agent to undergo remedial coursework. A condition was also imposed on his license, requiring Hsu to be supervised for 24 months by a supervisor approved by the insurance council.
