ASIC warns on third party compliance

ASIC deputy chair Peter Kell has identified a lack of due diligence around third party compliance consultants and research providers as a “key risk” for licensees and advisers.

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by Tim Stewart - October 14, 2013 1 comments

Speaking at the Association of Financial Advisers conference at the Gold Coast, Mr Kell said it is important for advice providers to understand the “nature and limitations” of third parties.

“This has come up quite a bit in our recent surveillance work … it is too often a source of problems for licensees,” he said.

“It should be obvious that you can't outsource your compliance [completely],” said Mr Kell.

He also stressed the importance of doing due diligence on new authorised representatives.

Mr Kell pointed out that advisers will be more likely to fail the best interests test if they dispense “cookie cutter” advice.