Advisers surprised by breaches reported to ASIC

Holley Nethercote Paul Derham AFSL breach reporting

10 June 2021
| By Jassmyn |
image
image
expand image

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”.

“Advisers don’t know it’s happening and they’re applying for licences and then ASIC says ‘we’re going to impose a compliance consultant condition or limit you in this way or show us what your responses are to these allegations’,” he said.

“And sometimes advisers are surprised when they can’t get information from their dealer group [about the report].”

Derham noted there were shared support offerings by law firms and some banks for advisers looking to go out on their own.

“You can go out on your own these days and get that wrap around support that you need that’s more available than that’s been,” he said.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

1 month 1 week ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

1 month 1 week ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

3 months 2 weeks ago

Entireti has unveiled the new name for the AMP financial advice businesses that it acquired last year....

6 days 9 hours ago

Lonsec has appointed a new chief executive for its research and ratings division as Mike Wright takes up a new role in light of the acquisition of Evidentia Group by Lons...

1 month ago

The Financial Services and Credit Panel has cancelled the registration of an NSW adviser for two years as it felt he displayed a ‘level of incompetence’ in providing advi...

1 month ago

TOP PERFORMING FUNDS