MAGAZINE OF CHOICE FOR AUSTRALIA’S WEALTH INDUSTRY
www.moneymanagement.com.au
Vol. 35 No 10 | June 17, 2021
17
ETFS
Rise of thematics
20
ADVICE
Being a family CFO
COMPLIANCE
Responsible investing
Advisers surprised by breaches reported to ASIC BY JASSMYN GOH
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Drowning in compliance FINANCIAL advisers are about to be hit with a raft of compliance obligations over the next few months, adding to the difficulty of trying to remain the industry with a viable business. From now until October, the regulatory changes include the independence disclosure, ongoing fee arrangements and fixed term agreements requirements, new complaints handling requirements, new breach reporting requirements, and design and distribution obligations. Financial services lawyers warn that advisers need to act now to make sure they are ready once these requirements come into place to avoid any compliance breaches. Hall and Wilcox partner, Adrian Verdnik, said: “There’s this continuum that is pushing advisers to a particular way of practicing and it involves a whole lot of compliance, and this approach places a heavy unreasonable burden when giving advice to retail clients”. Agreeing, Holley Nethercote partner, Paul Derham said the “landslide” of regulatory reforms was tough work for advisers who just wanted to provide good advice to clients. “Politically, the Government wants to be seen to be implementing the Royal Commission recommendations and it seems to be just putting on more layers of obligations. Why doesn’t the Government remove obligations that doesn’t spark anyone’s joy?” he said.
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AN increasing number of financial advisers who are getting their own Australian financial services licence (AFSL) or moving to smaller boutiques have found themselves to be the subject of a breach notification without prior knowledge. Speaking to Money Management, Holley Nethercote partner, Paul Derham, said this was the latest problem to arise from the raft of compliance layers that were coming into place over the next few months. “There have been a number of advisers who have been subject to a breach notification or some other notification as a previous licensee has gone and told something negative to the Australian Securities and Investments Commission [ASIC] but the adviser did not know,” he said.
“We’re starting to see a lot of that happen with advisers going and getting their own licences and going to smaller boutiques and then discovering things have been said about them. “This is not a problem for everyone but it’s a new problem now that larger dealer groups are reporting so much misconduct and that’s a new thing.” The new breach reporting regime would commence on 1 October, 2021, and licensees must lodge a report within 30 days of when they believed there would be or had been a significant breach. However, Derham said a lot of bigger dealer groups had been reporting things that “might not even meet the current definition of a breach”. Continued on page 3
FASEA will indicate to advisers if an exam is worth re-marking BY CHRIS DASTOOR
ALTHOUGH the Financial Adviser Standards and Ethics Authority (FASEA) exam is marked on a pass or fail basis, FASEA has indicated it gives advice to advisers that are close to a pass that they can apply for a re-mark. The admission to a Senate Estimates committee should give some certainty to advisers who failed the exam and were unsure if it would be worth the effort to apply for a re-mark, which would cost $198 plus GST. This was particularly notable as with only three sittings left before the 1 January, 2022, deadline, applying for a re-mark might help advisers avoid any issues by being trying to get re-instated on the Australian Securities and Investment Commission (ASIC) Financial Adviser Register (FAR). Continued on page 3
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