The Financial Advice Association Australia (FAAA) has argued that financial and elder abuse should be taken into account when considering the use of non-standard identification documents.
In its submission to an AUSTRAC consultation on assisting customers who don’t have standard forms of identification, the association said the ramifications of “undue influence” and financial abuse are serious considerations for financial advisers.
“The proposed guidance suggests that a referee statement should be witnessed by an independent person, particularly if there is the potential for undue influence on the customer,” the submission said.
“Undue influence can be a symptom of financial abuse and often occurs in elder abuse situations. Financial advisers are deeply concerned for the victims of financial abuse and are uniquely positioned to detect signs of financial abuse due to their close relationships with clients and their families.”
Noting that issues surrounding financial and elder abuse often fall within the realm of domestic and family violence, the FAAA backed the consideration of financial and elder abuse “as an exceptional case where non-standard identification may be accepted”.
“We are concerned about the risk of undue influence of Australians occurring in relation to their interactions with financial services. We encourage AUSTRAC to take an active interest in this area as part of its approach to financial inclusion and family and domestic violence,” the FAAA said.
“We note the government’s ongoing commitment to address financial abuse (particularly elder abuse) through the Attorney-General’s Department. AUSTRAC guidance may present an opportunity to support victims of financial abuse, including through the current consultation.”
It added: “Undue influence can occur under a variety of circumstances and we agree this should be a consideration in instances where a person does not have access to standard documentation for identification verification prior to the provision of a designated service.”
The FAAA also flagged its concerns around other AML/CTF issues, particularly what it described as “inconsistency” between the ongoing customer due diligence programs that some product providers have implemented and current AUSTRAC guidance, which it said can cause additional strain for advisers.
“Under this AUSTRAC guidance, a referee statement may be provided by ‘another person before whom a statutory declaration can be made’. Financial advisers and financial planners are ‘approved licensed or registered occupations’ under the Statutory Declarations Regulations 2023,” the submission said.
“Hence, a financial adviser can provide a referee statement attesting to the identification of a customer with non-standard documentation. However, some product providers will not accept financial advisers’ attestation that an existing and long-term advice client is who they say they are, rather insisting on reverifying identification every 12 months, even if the client’s identification remains current and unchanged.”
“The financial adviser must unfairly wear the cost and time involved in this seemingly unnecessary re-verification of client identification. This has included requests to reverify a client’s driver’s licence, even though in some states a driver’s licence can be issued for up to 10 years, as noted on page 10 of the guidance.”
