Adviser wrong-doers should avoid returning to industry
The Australian Securities and Investments Commission (ASIC) has confirmed that it has opted not to pursue some miscreant financial planners who have left the industry but that it will do so if they choose to return.
The regulator has used an answer to a question on notice stemming from a Parliamentary Joint Committee to acknowledge that it has previously opted not to take action against advisers deemed to be of “Serious Compliance Concern” (SCC) because they had left the industry.
“In relation to those SCC advisers who were not then in the financial advice industry we decided that no further action would be taken at that time,” the regulator said.
“We have placed an alert on ASIC systems to notify us if relevant advisers re-enter the advice industry and in the event they do we will re-consider whether the adviser should be subject to regulatory action.”
The ASIC answer said there was no obligation on an Australian financial services licensee (AFSL) to notify ASIC that it has identified adviser compliance breaches beyond the breach reporting obligations prescribed in section 912D of the Corporations Act 2001.
“If suspected adviser misconduct is notified to ASIC, whether as a breach report or a report of misconduct, we will consider whether a surveillance or investigation is appropriate to assess the need for regulatory or other enforcement action,” it said. “As part of that process, subject to the circumstances in each case, we may place an alert on ASIC systems to notify us if the adviser moves between licensees or seeks to re-enter the advice industry.”
ASIC said that it had directed financial institutions to notify it of advisers identified as having suspected serious compliance concerns.
“Licensees also have an important role to play to ensure that advisers with poor compliance histories are identified when they move between licensees so that informed decisions are made in relation to the recruitment and supervision of those advisers,” the regulator said.
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