Licensee gets regulatory intervention
The Australian Securities and Investments Commission (ASIC) will impose additional licence conditions on Moneywise Securities following concerns around some of the advice provided to clients.
ASIC's investigation found some financial advisers working under the Moneywise license did not adequately consider the specific needs of the clients when recommending they establish a margin loan or a self-managed super fund (SMSF).
The regulator was also concerned Moneywise did not properly manage conflicts of interest where the advice resulted in transactions with its related entity.
According to ASIC, there was insufficient compliance around replacing one financial product with another.
"The concenrs related to inadequate cost and feature comparisons between the clients' existing superannuation and the recommended SMSF," the regulator said in a statement.
As a result, the licensee will appoint an independent expert to assess and review advice provided to clients in relation to margin lending and SMSFs, Moneywise's conflicts management arrangements and planner monitoring systems, in addition to the adequacy of its internal dispute resolution system.
When providing advice on more complex financial products such as margin loans or SMSFs, the advice provider must be particularly diligent in ensuring the financial product is suitable to the specific needs of the client," said Louise Macaulay, senior executive leader at ASIC.
The independent expert will report to ASIC and Moneywise over the next 18 months to ensure the company meets its licence conditions and regulator's concers are addressed.
AUTHOR
Staff Writer
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