The Australian Securities and Investments Commission’s (ASIC) latest FSCP findings relate to an adviser it called “Mr H” and another adviser called “Mr O”. In both cases, the findings were released on the same day and contained identical language in terms of both the contraventions and the written directions.
Mr H and Mr O were both found to have contravened sections 946B(3A), 961B(1), and 921E(3) of the Corporations Act 2001 and regulation 7.7.09 of the Corporations Regulation 2001.
“The relevant provider failed to keep adequate records of advice in relation to further advice given to three clients in contravention of s946B(3A) and regulation 7.7.09,” ASIC said about both cases.
“The sitting panel found that the further advice given to the three clients was personal advice and it was inappropriate that it was given in general advice letters.
“The relevant provider did not act in the best interests of the clients as required by s961B(1) as the relevant provider had not kept adequate records e.g. to reference the research that formed the basis of the recommendations or advice, such that the relevant provider could not prove that they had performed all the actions specified in s961B(2) e.g. conducted a reasonable assessment of the financial product recommended.”
As a result, the sitting panel found that both advisers had “failed to demonstrate the Code of Ethics’ Values of competence and diligence, and breached its Standards 5 and 8”.
According to ASIC, both Mr H and Mr O will be required to receive specified supervision, including having an independent expert in financial services laws compliance to pre-vet and audit the next 10 pieces of advice that each intends to present to a retail client.
They must also provide the audit findings to ASIC, as well as covering the cost of the independent expert’s work.
The findings represent the fifth and sixth actions taken by the FCSP since its launch, with the first coming in June.
“including having an independent expert in financial services laws compliance to pre-vet and audit the next 10 pieces of advice that each intends to present to a retail client.”
“They must also provide the audit findings to ASIC, as well as covering the cost of the independent expert’s work.”
Independent Expert? Independent of what?
Prob independent of employment of the firm or licensee I’d suspect.
This sounds like it wouldnt be breach post qoar and the exact overly litigious crap that neither clients nor advisers benefit from.