ASIC imposes conditions on dealer group licence
The financial services regulator has imposed additional conditions on Lionsgate Financial Group's financial services licence, after conducting a surveillance of its advice business.
The Australian Securities and Investments Commission (ASIC) found Lionsgate did not properly assess its advisers' competence to provide financial services, nor did it take reasonable steps to ensure the advisers complied with the laws.
Furthermore, the regulator was concerned that the dealer group did not maintain sufficient resources to carry out supervisory arrangements, have adequate measures in place to meet its record-keeping obligations and implement effective audit programs.
Lionsgate has 103 financial advisers, after significantly increasing that number over the past three years.
To keep its licence, Lionsgate will have to appoint an independent expert to review all aspects of the licensee's arrangements for compliance with its general licensee obligations.
The expert will report to both Lionsgate and ASIC and provide recommendations which Lionsgate will be required to implement. The expert would also review some instances of advice provided to clients and determine whether the advice complied with the law.
ASIC Commissioner Peter Kell said the additional conditions were designed to guide Lionsgate in putting in place a compliance framework that ensures the advice provided is of the required standard.
"Licensees are responsible for the conduct of representatives that they appoint," Kell said. "It's very important that they have adequate supervisory arrangements in place to identify and address advice deficiencies quickly."
ASIC will continue to monitor Lionsgate's compliance for two years.
Recommended for you
Sequoia Financial Group has declined by five financial advisers in the past week, four of whom have opened up a new AFSL, according to Wealth Data.
Insignia Financial chief executive Scott Hartley has detailed whether the firm will be selecting an exclusive bidder for the second phase of due diligence as it awaits revised bids from three private equity players.
Insignia Financial has reported a statutory net loss after tax of $17 million in its first half results, although the firm has noted cost optimisation means this is an improvement from a $50 million loss last year.
With alternative funds being described as “impossible” for fund managers to target towards advisers without the support of BDMs for education, Money Management explores the evolving nature of the distribution role.
