Three Australian financial services (AFS) licensees have been issued with Australian Securities and Investments Commission (ASIC) infringement notices for allowing authorised representatives of their dealer groups to provide personal advice while unregistered.
The three licensees on the receiving end of this regulator action were Australian Advice Network Pty Ltd, IA Advice Pty Ltd and Sherrin Partners Services Pty Ltd. As a result, each entity paid a fine of $31,300 in March.
In making the announcement, ASIC stipulated payment of these infringement notices is not an admission of guilt or liability.
The corporate watchdog stated it acted because it had reason to believe the licensees in question had authorised a representative who was unregistered to provide personal advice to retail clients with regard to relevant financial products.
Each licensee breach reported to ASIC and registered the authorised representatives in question upon becoming aware of the circumstances. The regulator took these actions into account in deciding the appropriate enforcement action to take.
“Failure to register a financial adviser creates a risk for consumers who may receive personal advice from unregistered advisers,” ASIC explained.
“The registration requirement is an important consumer protection mechanism to ensure AFS licensees have considered and received declarations about whether their financial advisers are fit and proper and meet the education and training standards.
“Failure to register financial advisers may also indicate that AFS licensees do not have adequate governance arrangements in place to ensure they comply with the law.”
The industry’s ongoing compliance with the requirement to register authorised representatives before they can provide personal advice is an area being closely monitored by ASIC and the regulator has been raising the awareness of AFS licensees about the issue.
To this end, in January last year, it warned the practice of allowing unregistered authorised representatives to give personal financial advice could result in significant consequences for the parties involved.
