Reflecting ASIC’s increasing focus on the adequacy of financial advice, ASIC has issued a media release about the imposition of additional licence conditions on an AFSL holder in response to deficiencies in its superannuation rollover advice activities including:
- failure to act in clients’ best interests
- failure to prioritise clients’ interests.
The deficiencies appear to stem from the provision of ‘boilerplate’ (or as ASIC refers to it ‘one size fits all’) advice to clients (that is, advice that does not sufficiently take into account an individual’s circumstances such as membership of a defined benefit scheme) by an authorised representative of the AFSL holder.
The media release is a timely reminder of the importance of monitoring the activities of representatives and the onerous consequences of failing to do so.
The additional onerous licence conditions include oversight of the AFSL holder’s advice arrangements by an external expert for 18 months. Remediation of affected clients is expected.
For more information refer to the media release (link to ASIC website).