ASIC hits RetireInvest for poor compliance
RetireInvesthas given an enforceable undertaking to theAustralian Securities and Investments Commission(ASIC) after an investigation by the regulator found the financial planning group’s compliance procedures lacking.
The ASIC surveillance project and investigation found that some authorised representatives within the dealer group had failed to fully disclose fees, commissions and benefits payable to them that might influence their financial advice.
It also found some did not undertake a thorough needs analysis to ensure clients were placed into investments consistent with their circumstances and risk profile.
ASIC was concerned the compliance processes of RetireInvest were not adequate to properly identify and report breaches of the Corporations Act, Corporations Regulations or its licence conditions.
The regulator also found that RetireInvest’s internal complaints handling system was not always followed by the relevant officers, meaning clients did not receive a timely and efficient resolution of their complaints.
The enforceable undertaking to ASIC requires RetireInvest to improve its compliance standards and redress clients who may have been adversely affected by the dealer group’s past practices.
RetireInvest has also undertaken to engage an independent compliance consultant who will review compliance systems and procedures, make recommendations for changes and redress complaints made by clients.
“We acknowledge the need to further strengthen our compliance and complaints procedures and ensure they are systematically applied,” RetireInvest general manager David Phelan says.
The dealer group will post a notice in its client newsletter and on its website to encourage clients who may have been affected by its practices to come forward.
In addition, RetireInvest has undertaken to ensure all authorised representatives identified in the ASIC actions have completed training on their obligations when providing securities recommendations, as well as the complaints handling system, by May 2003.
The investigation was carried out between January 2001 and June 2002 in which time RetireInvest received 49 client complaints.
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