Australian firms AMP Financial Planning and SMSF Advisers Network were given additional licensing conditions after the regulator expressed concerns over internal proceedings.
The Australian Securities and Investments Commission (Asic) found that SMSF’s advisers failed to comply with best interest duty obligations.
The concerns sparked from many of the firm’s client files and documents, which showed templated wording and a lack of personalised support.
As a result, Asic ordered SMSF to engage with an independent expert to review and assess its compliance structure to make sure its advisers were working in the clients’ interests.
Adequacy of arrangements
On the other hand, AMP received additional conditions to its licence following its application to provide managed discretionary account (MDA) services.
These types of services are particularly risky as they allow MDA providers to make investment decisions on behalf of their clients.
Asic’s conditions included a full review of the firm’s compliance personnel and the advisers who would be providing such services. AMP’s documents and policies are also going to be reviewed, as well as its client advice and adviser audit files.
Improving the whole industry
“Asic expects to see improvements in the standards of supervision, conduct and compliance across the financial advice industry, and the imposition of additional licence conditions is part of ongoing efforts to make our expectations clear to licensees,” said Danielle Press, commissioner at Asic.
“Asic will impose licence conditions based on what an applicant is seeking authorisation for, what we know of them, and what we may see during the application assessment process.
“New licence applicants and licensees seeking variations can expect to see Asic tailor licence conditions more often.”