ASIC imposes conditions on dealer group
The Australian Securities and Investments Commission (ASIC) has imposed conditions on the licence of NSW-based Lionsgate Financial Group due to concerns over its compliance.
The additional conditions follow a surveillance of the group’s advice business.
Lionsgate currently has 103 advisers after significantly increasing that number over the past three years, according to ASIC.
ASIC said it was concerned Lionsgate was not complying with its general obligations as an Australian financial services (AFS) licensee
Specifically, ASIC said it was concerned Lionsgate did not maintain sufficient resources to carry out supervisory arrangements or properly assess and monitor its representatives’ competence to provide financial services.
The group also did not take reasonable steps to ensure that its representatives complied with financial services laws in providing financial services to clients, or have adequate measures in place to meet its record-keeping obligations.
ASIC was also concerned the groups supervisory arrangements and audit program were ineffective.
ASIC said it has now varied Lionsgate’s AFS licence to include conditions that require the appointment of an independent expert to review all aspects of the licensee’s arrangements for compliance with its general licensee obligations.
That expert will also conduct Lionsgate’s audit program for advice provided by its representatives for a limited period, and review some of the advice provided to clients. The expert will also make recommendations about what remedial action is required, if any, ASIC stated.
ASIC commissioner Peter Kell said it was imperative that as advice businesses grow, they review their compliance arrangements and resource the business accordingly.
ASIC said it will continue to monitor Lionsgate’s compliance, via reports from the independent expert, for two years.
The announcement follows the news that BT has been tipped as a potential home for fleeing AFS advisers, as the group potentially faces voluntary administration.
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