ASIC hints at greater SOA scrutiny

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.”