ASIC moves in on Grosvenor complaints
The Australian Securities and Investments Commission (ASIC) has commenced an enforceable undertaking action on Grosvenor Securities’ 40 advisers, following a surveillance visit and follow up inquiries.
ASIC has reviewed the practises of a number of the Melbourne based company's advisers and identified deficiencies in training and supervision of its representatives. This included instances where representatives had recommended products and asset allocations which ASIC believed were not appropriate to those clients' needs.
An enforceable undertaking is used by ASIC as the step before taking court action. It gives a company the opportunity to comply with ASIC's complaints in a set time period.
ASIC also reviewed the method of which Grosvenor's representatives obtained payments directly from clients for fees owed to Grosvenor as principal. The industry regulator has formed the view that the company's method of payment breached the Corporations Law - which requires licence holders to account for all income received from commissions.
According to Grosvenor's report, released by ASIC, the company has agreed to appoint an independent consultant to conduct a compliance review of its procedures and processes over a period of 12 months; appoint a full time compliance officer to make annual visits to its representatives.
Grosvenor is not the first Australian company to have fallen foul of ASIC and had an enforceable undertaking placed on them. Connelly Temple, National Mutual Health Insurance, Westpac and Suncorp-Metway have all been investigated in the past year.
Victorian Regional Commissioner Sue Carter says the surveillance of licence holders was part of ASIC's continuing efforts to help protect the investing public by improving the standards of participants in the financial services industry.
"By agreeing to measures set out in the enforceable undertaking Grosvenor is demonstrating a commitment to implement procedures which ensure compliance with legal requirements and best industry practises," he says.
AUTHOR
Recommended for you
While the August financial advice exam saw a lower pass rate of 62 per cent compared with 70 per cent in previous sittings, this expert believes it’s for a positive reason.
With the FY24 reporting season behind us, five major financial advice licensees are looking to achieve growth either through inorganic activity or internal expansion.
An alleged involvement with an insurance claims business has led the Federal Court to vary the orders of a banned adviser to add the threat of jail time.
The investment platform has announced several improvements, enabling advisers to create more bespoke solutions for clients as well as further exclusion options.
