The report, released last Thursday, reveals the results of ASIC activity between July and December 2014 found concerns about levels of non-compliance in the financial planning and stockbroking sectors.
Specifically, the report raises concerns about the use of statements of advice by financial advisers and “full-service brokers”, revealing intentions to increase “management oversight and adviser training”.
“To date, our compliance reviews have identified deficiencies with the provision of personal advice and the requirement to provide a clear, concise and effective Statement of Advice,” the report said.
“For example, we identified market participants that had not provided sufficient information to clients regarding the basis on which the advice was given — suggesting that inadequate consideration may have been given to clients’ circumstances, goals and objectives.”
The report also listed “unauthorised discretionary trading” as an issue that required action over the designated period.
“For market participants with licence authorisations to conduct managed discretionary trading, we reviewed their processes to ensure compliance with the relevant requirements,” the report stated.
“In some instances, additional guidance was provided to ensure that participants’ obligations were met.”
The contradictory nature of ASIC’s requirements are fully displayed here. On the one hand they want “…a clear, concise and effective Statement of Advice.”.
They then state that people “…had not provided sufficient information to clients regarding the basis on which the advice was given…”.
Anyone who prepares and/or presents SoA’s knows that the more pages it has, the less likely clients are to read or understand the contents.
As mentioned in a previous comment, the ultimate irony is that ASIC’s own sample SoA wouldn’t pass ASIC’s compliance requirements!
Ensure you have a crystal ball so you can for see every event imaginable and unimaginable
Forgotten the key factor of advice its an opinion not a statement of fact.
Just to confirm all my advice provided is an exact science!! o please get you hand of it. This professional is going to eaten up by lawyers. lived to long, ran out of money best i call my lawyer to sue my advisor.
Hmm let me call my one size fits all industry fund!!! or the allinged bank/insurance advisor.
Have a look at the ASIC SoA example pretty good a shame that we not pass our compliance team. Also please ASIC when was the last time you gave advice to a client?
Why don’t ASIC stick a fulltime compliance officer in every adviser’s office who can pre-vet every phone call, e-mail and SOA and sit in on client meetings then relay that data back to ASIC head office every hour so they can quash any potential compliance issues that may occur? That way the client will always be protected and nothing can ever happen to them because ASIC will intervene before the damage happens thus protecting the customer and pre-vetting every piece of the advisers advice before it’s ever given. They can then shut down the advisers business or cancel the licensee in real time to ensure the industry complies with the practices of the Industry Super Fund Network and Labor governments agenda I think that would demonstrate that ASIC really are serious about closing down independent advice businesses which is what they are ultimately setting out to achieve.
Great. Another round of increased compliance and ever expanding regulation.
Name one other profession that undergoes what we have to endure or has to write the degree of information when providing a recommendation?
These guys are out of control, and feeding the solicitors who are circling like the sharks they are…
Ditch SOAs and provide an industry standard online report that has mandatory sections to be completed. Make it a cloud based program or whatever, so licensees and ASIC can view them if they see fit. Can’t be that hard, surely. Any modelling and projections can be done as a separate file. The current situation with hundreds of different styles of SOAs is ridiculous. Remove the mush, get straight to the advice.