The Administrative Appeals Tribunal has affirmed ASIC’s decision to suspend the AFSL of Sydney-based dealer group MASU Financial Management for noncompliance.
In a statement, the regulator said it suspended MASU’s AFSL for eight weeks on 26 April 2016 following concerns the firm had in the past not complied with its obligations and was likely to contravene its obligations.
ASIC had conducted a review of financial advice related to complex products and identified concerns there was a 'one size fits all' approach to Statements of Advice as well as 'boiler plated' advice and disclosures.
MASU appealed the decision, saying the suspension was not justified or lawful. The firm said the compliance issues had been addressed, or substantially addressed, at the time of ASIC’s suspension decision.
However, the AAT has now determined that MASU was not compliant in the past and, despite recent efforts to introduce compliance measures, it “has not yet reached the point where it can be said to be compliant”.
The AAT also said that “given that recent history, it is likely further contraventions will occur, at least until those further improvements are implemented … all financial services firms need to embrace their obligations”.
“It is not enough that they take up the cause because they have been caught out and need to appease the regulator. They must learn to want to be compliant,” the AAT said.
“A brief period of suspension will help spur the embrace of a compliance culture and underline the need to avoid a return to bad behaviour … through the publication of this decision – it will deter bad behaviour by other firms.
“The investing public will also be encouraged by the regulatory action because it demonstrates bad behaviour will be sought out and addressed in a constructive way. That is all consistent with ASIC’s role and the objectives of Chapter 7.”
MASU has the right to appeal to the Federal Court of Australia, on a question of law, within 28 days of the AAT decision.
MASU’s AFSL was initially suspended between 27 April 2016 and 4 May 2016 before it lodged an appeal with the AAT. Following the AAT's decision to affirm ASIC's decision, MASU's licence will now be suspended from 6 February 2017 to 25 March 2017.
ifa reported in February 2015 that MASU was one of 10 licensees that were found to be providing "deficient" complex product advice.
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