ASIC clarifies adviser record keeping duties
The Australian Securities and Investments Commission (ASIC) has sought to clarify financial advisers' record keeping obligations by amending Class Order 14/923 ‘Record-keeping obligations for Australian financial services licensees [AFSLs] when giving personal advice'.
The amendments clarified beyond doubt that AFSLs must have access to records for the period of time required to keep the records, even if a person other than the licensee stored the records.
The amendments also instructed authorised representatives who were advisers that they must keep records and give the records to their authorising licensee if the licensee requested the records in order to comply with financial services laws.
While the amendments to licensee obligations clarified rather than amend obligations, ASIC said it would still take a facilitative compliance approach for the first six months in order to ensure advice licensees had access to records as it recognised some licensees would need to change their systems to comply with the class order.
"Our facilitative compliance approach applies where advice licensees make a good-faith attempt to comply with the obligation but are unable to do so because of, for example, the need to make systems changes," ASIC said.
Deputy chairman, Peter Kell, said advice licensees were responsible for the advice given by their authorised representatives and should have the means to monitor them.
"Consumers should have trust and confidence that advice licensees have access to their representatives' records so they can monitor the advice given by their representatives and remediate consumers if something goes wrong," Kell said.
AUTHOR
Malavika Santhebennur
Recommended for you
Insignia Financial has made four appointments, including three who have joined from TAL, to lead strategy and innovation in its retirement solutions for the MLC brand.
The third quarter of 2024 saw the first positive increase in adviser numbers for 12 months, according to the latest quarterly Musical Chairs report, with new entrants overwhelmingly choosing to join privately owned firms.
As more advisers review their fee structures, Business Health has shared six steps to calculating the price to deliver financial advice services in a profitable yet suitable way.
ASIC’s Sarah Court has confirmed the regulator is carrying out systematic work on providers of unlicensed advice but admits it is a case of “whack-a-mole” when it comes to disciplining them.
