ASIC to investigate unlicensed advice
The Australian Securities and Investments Commission (ASIC) is currently working on a project that aims to crackdown on people providing unlicensed financial advice.
The project specifically looks at superannuation, with particular attention on accountants and self-managed super funds.
The investigation has been prompted by ASIC’s recently released Shadow Shopping Survey on Superannuation Advice, which discovered 16 cases where advice was given illegally on issues that require a licence.
Of these cases, 14 involved unlicensed accountants and two involved tax agents, with each case being problematic in several ways.
The survey also revealed two examples of unlicensed mortgage brokers providing superannuation advice, one of whom appeared to be a back-office employee.
ASIC director of compliance for financial services Darren Williams said the new project involved looking at real cases of unlicensed advice and, if necessary, prosecuting the offenders.
“It will be a structured surveillance program, although not like shadow shopper,” he said.
“We will be doing our own looking as well as investigating complaints. It will be a continuation of our focus on unlicensed conduct generally.”
He said ASIC had the power to take action, and that serious cases could result in jail terms.
“At the high end, it is a criminal offence and can attract up to a two-year jail sentence,” Williams said.
ASIC does not plan to release its findings in the form of a report, but will be identifying certain offenders.
“We will be publicising specific cases revealed in the project,” Williams said.
“The results will speak for themselves.”
ASIC recommends that all accountants review their business practices on superannuation advice to ensure they comply with the Corporations Act.
It stated in the shadow shopper report that accountants should either become Australian Financial Services Licence representatives, or confine themselves to issues on which they can legally give advice.
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