Platform providers should feel moral obligation to report fraud: lawyer
Platform providers who spot potential fraud by financial planners have a moral and ethical duty to report them to their Australian Financial Services licensee, a lawyer believes.
Speaking at the Money Management 2014 Platforms and Wraps Conference, Alexis Compliance and Risk Solutions principal Christina Kalantzis said there was no legal obligation on platforms to report any suspicious withdrawals of funds by an adviser.
However Kalantzis said platforms were ideally placed to identify potentially fraudulent transactions by advisers.
She told delegates that rouge advisers were using platforms "to get clients' money", adding that she was working on cases of fraud, which she believed could have been prevented had platform providers flagged concerns over the actions of the advisers in question.
"At a law level, it's all in the hands of the AFSL. However, I've got 15 cases right now where it's all about misappropriation of funds coming from platforms... (so) morally and ethically I think there's a role for platforms in the monitoring and supervision stakes."
AUTHOR
Nicholas O'Donoghue
Recommended for you
ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
