Smaller licensees in need of improved documentation
Advice licensees have work to do on improving their documentation of systems and processes.
Jim Bulling, partner at law firm K&L Gates, said this particularly applied to smaller licensees, a business group had been previously been flagged for regulatory failings.
Speaking at a training workshop run by The Principals Community, Bulling said: “Regulator intervention and enforcement is part of doing business in the financial advice space and it is a risk that needs to be managed just like any other risk.
“The key to managing this particular risk is to have comprehensive, documented and sophisticated systems in place to track compliance and regulatory issues, [and] if ASIC goes beyond a simple request for information, to get professional assistance at an early stage”.
For this reason, sessions included training on breach reporting, complaints management, design and distribution obligations (DDO) and regulatory engagement.
While technology could help businesses, he also warned it presented a threat for advice licensees in the form of cyberhacking.
“Cyber risks are worthy of further conversation amongst advice businesses in 2023 and should be a standing agenda item on licensees key committee meetings.”
The workshops were held annually in five cities nationwide to provide insight and experience to the organisation’s members. This included 126 financial advice businesses, authorising over 1,250 advisers.
AUTHOR
Laura Dew
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We can always rely on some from a totally different occupation to tell financial planners how to do things better. Usually a lawyer.