Advisers being disadvantaged by ASIC

The Australian Securities and Investments Commission (ASIC) has been accused of creating “a recipe for chaos” relating to its requirements for advisers seeking their own Australian Financial Services Licences.

Smart Compliance principal Brett Walker has claimed ASIC’s insistence on production of RG146 certificates from such advisers represents a recipe for chaos, in what he describes as “the inevitable move away from the institutional dealer model”.

“Recently we have attempted to convince ASIC that if an RG146 certificate cannot be located, it is simple logic that the adviser could not be on the ASIC Register or Authorised Representatives unless their dealer had assessed them to be RG146 compliant,” he said.

However Walker said ASIC had refused to accept the argument, and was insistent that the adviser produce a piece of paper that may have been issued almost 10 years earlier – and at a time when the adviser did not anticipate needing to produce it to ASIC at some future point.

“Some dealers are showing a real reluctance to look for their file copies, telling advisers who ask for them to go to the Registered Training Organisation [RTOs] that performed the RG146 assessment,” he said. “Some of these RTOs no longer exist or may have simply destroyed older files.”

Walker said the problems had been pointed out to ASIC which had responded that perhaps some clients should consider going exclusively wholesale, since RG146 only applies to retail clients.

“Try telling someone with a large book of retail clients they can have their own AFSL provided they get rid of their retail clients. It makes no sense,” he said.

Walker said that what was required was a protocol whereby, at a policy level, ASIC accepted that if someone had been listed on the ASIC register by their AFSL they had been assessed as being RG146 compliant prior to that listing.

He said a statutory declaration sworn by the adviser might also give additional comfort.

“The alternative is a situation where advisers who have already been assessed as competent and who have practised competently for years will have to retrain or obtain an individual assessment before they can move away from their current dealer,” Walker said.