Licence conditions imposed on TFS
The Australian Securities and Investments Commission (ASIC) has imposed additional conditions on the Australian financial services licence (AFSL) of Countplus subsidiary, Total Financial Solutions Australia Limited (TFSA).
The regulator said it had imposed the additional conditions following a surveillance exercise begun in October last year, focusing on financial product advice provided by one of TFSA's authorised representatives and which had identified serious concerns including "a ‘one size fits all' approach when providing superannuation rollover advice, systemic failure to act in the client's best interests, especially in instances where the advice related to a client's existing defined benefit superannuation funds and failure to prioritise the client's interests when providing advice".
ASIC said the licence conditions were sought after ASIC also identified concerns about the steps taken by TFSA to comply with financial services laws, in particular its monitoring and supervision of the relevant authorised representative.
TFSA has consented to the licence conditions, agreeing to appoint an ASIC approved compliance expert for a period of 18 months. The expert will supervise TFSA in reviewing the advice that raised concerns in the ASIC surveillance and will provide findings to both ASIC and TFSA. TFSA and the expert will implement and oversee a client remediation program for affected clients.
The expert will also conduct a review of the adequacy and effectiveness of its licensee compliance arrangements. As part of this condition, the expert will conduct an analysis of TFSA's compliance arrangements, focusing on the adequacy of its monitoring and supervision of its representatives and its dispute resolution procedures.
ASIC deputy chairman, Peter Kell said that adequate supervisory arrangements had to be in place to ensure advisers were providing advice that was in the best interests of their clients.
"We know that deficiencies in licensee guidance and supervision can lead to systemic misconduct by advisers," he said.
The regulator acknowledged the cooperation of TFSA in taking steps to acknowledge ASIC's concerns and working with ASIC towards an agreed and client-focused outcome in this matter, but noted that ASIC's surveillance activity was continuing with respect to the conduct of the individual authorised representative.
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