ASIC has accepted an enforceable undertaking from a Perth-based financial advice firm after failures in the company’s risk management and compliance frameworks.
Under the EU, NEO Financial Solutions will engage an independent expert to assess, report and make recommendations about its risk management and compliance structures.
NEO has approximately 160 individual and corporate authorised representatives.
Surveillance of NEO's business by ASIC led to concerns about the firm's failure to address important client objectives, not making reasonable enquiries to determine all relevant client circumstances and not fully considering the consequences when replacing existing financial products.
ASIC's surveillance indicated that NEO failed to employ risk management and compliance frameworks appropriate to the nature, size and complexity of its business, which had grown considerably since its inception.
According to ASIC, NEO had inadequate resources to carry out monitoring and supervision; inadequate identification, recording and assessment of risks; audit and remediation programs that were not timely and effective in identifying and remediating advice conduct and deficiencies; vetting policies and procedures that were not consistently applied or adequate to manage compliance risks; and failed to take reasonable steps to ensure its authorised representatives complied with financial services laws.
ASIC acknowledged the co-operation of NEO's management in resolving the regulator's concerns.
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