The Australian Securities and Investments Commission (ASIC) has put the financial advice sector on notice regarding the widespread practice of failing to correctly witness binding death nomination forms for superannuation benefits.
This followed ASIC’s discovery that many financial advisers either witness or have staff members witness client signatures on the binding forms without being in the presence of the signatory. They also found that forms had been backdated.
These practices do not comply with the Superannuation Industry (Supervision) Act 1993 and may result in the forms being invalid, which could lead to the rejection of the death nomination.
Peter Kell, acting ASIC chair said that Australian Financial Services (AFS) licensees, advisers and their staff should consider this a final warning against engaging in these practices.
He particularly emphasised that licensees would be held responsible for misconduct in this regard.
“AFS licensees have ultimate responsibility for the conduct of their representatives and need to effectively monitor and supervise their representatives,” Kell said.
ASIC said that AFS licensees must train staff on their professional and ethical obligations, monitor and supervise their representatives, remediate consumers where misconduct is found, and identify breaches in a timely manner.
