Posts tagged ASIC
Curated Content: Disclosure, Compliance and Best Interests

Smarter Compliance. This lucky-dip of compliance and regulatory treasures offers ASIC’s recent admission that disclosure might not always work (with accompanying research), ASIC’s disclosure of the risks of inappropriate SMSF advice (with fact sheet) and a summary of APRA v KELAHER. We also look at a wonderful HBR article on why compliance programs fail and end with a number of articles on Daniel Kahneman. This post contains almost everything a Compliance and Risk Expert needs for their professional development.

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Curious cats and compliance: Managing non-financial risks

Smarter Compliance. Unless you’ve just emerged from a decades-long coma, you probably realise that few licensees (particularly few large and vertically-integrated licensees) have effectively managed non-financial risks or ensured they operated “efficiently, honestly and fairly”. Some of this may have been intentional but, perhaps unknowingly, their failure to recruit and retain capable, confident and courageous compliance talent was a key reason for their public failures. This article looks at curiosity and shows why its critical to an effective compliance function and a sustainable advice business.

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Accentuating the positive: a new approach to compliance

Smarter Compliance. Many licensees have, traditionally, treated compliance as a ‘necessary evil’ or a function generally irrelevant to their day to day activities. Fortunately for consumers, the Royal Commission publicly highlighted the consequences of this approach. The grudging acceptance of ‘compliance’ has now been replaced with a more polished rhetoric, but in an environment characterised by increased public scrutiny and an increasing appetite for litigation this may not be enough. This article argues for the need to pre-empt legislative changes by adopting a forward-looking approach to compliance; it’s simply better business.

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Welcome to the matrix: Digital Consent and compliance obligations

Smarter Compliance. In an industry both riven and driven by technological change, financial advisers have been slow to take advantage of the convenience the law provides to them. This article, focusing on Ongoing Fee Arrangements and Renewal Notices explores how, and to what extent, paper forms and wet signatures are legacy issues that can be replaced and optimised.

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Governance Insights: "Houston, we have a problem"

Smarter Compliance. While you may have dismissed your Compliance Manager’s obsession with effective management as an obvious and transparent attempt to secure significance, the reality is that your governance framework - and your demonstrable commitment to good governance - is the foundation of your compliance framework. Without an effective governance framework, you cannot, and will not, comply with the financial services laws and the conditions of your licence. This article explains why good governance matters and provides tips for improving your decision making framework and its consistent and deliberate application.

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Five questions (and answers) about FDS'

Smarter Compliance. Although it’s popular to dismiss the core of ASIC’s report on ongoing service as the inevitable consequence of vertical integration, inadequate resourcing and legacy issues, the perceived complexity of the disclosure and engagement processes introduced by FOFA played a part. Although competent Licensees and capable advisers embraced and operationalised these requirements, they still have questions. Here are five of the most frequently asked questions.

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AFSL Fundamentals: Your people

Smarter Compliance. Our Licensee Review assesses a licensees’ compliance risk framework including their systems, structure, policies, processes and people. Too frequently, Licensees focus their attention on outputs – advice processes and associated risks – rather than on the talent on whom they depend to provide efficient, honest and fair financial services. This article focuses on the ASIC’s expectations and the policies required to recruit, promote and manage staff in a manner consistent with the law and good industry practice. 

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AFSL Fundamentals: Self-licensing

Smarter Compliance. As 2019 draws to a close, many advisers (and some licensees) are being forced to consider their futures. It’s a daunting task given the costs, consequences and implications of any decision they make. An increasing number of advisers think that self-licensing will provide them with the autonomy, financial security and other benefits they need to properly serve their clients. In this article we’ll try to sublimate our self-interest and provide the relevant information advisers need to decide whether self-licensing is an option for them.

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The cost of conduct risk

Smarter Compliance. Rep 515 “Financial advice: Review of how large institutions oversee their advisers” is the gist that keeps on giving. While it’s a gift that many would have returned immediately, there’s little doubt of its influence on the financial services industry - directly and as magnified by the Royal Commission. While it led to extensive changes in the financial advice industry including fragmentation, re-alignment and the increasingly definite separation of advice from product, it has reinforced the significant costs and obligations associated with providing advice. This article avoids prediction in favour of a simple discussion of the latest update and its implication for independent Licensees.

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AFSL Fundamentals: A quick guide to Professional Indemnity

Smarter compliance. While disclosure and effective governance may assist you to secure Professional Indemnity Insurance, securing adequate cover requires vigilance and careful consideration. We explore the minefield of Professional Indemnity Insurance with the expert guidance of Greg Hansen, Director of Professional Risks at Austbrokers Countrywide. This guide for Licensees may assist you to both understand ASIC’s requirements and your Licensee obligations. It may also help you find better cover. 

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An auditor's view of conflicted advice (SMSF)

Smarter Compliance. The conflicts between interests and duties was an issue frequently touched on by the Royal Commission. In fact, observers might suggest that all the misconduct and mismanagement exposed was caused by conflicts of these sort. In this article, an auditor tackles the issue form a practical perspective and explores the best way to handle conflicts of interest and duty.

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Competence, Capability and Courage

Smarter Compliance. Assured Support has long argued for the need to collectively develop a capability framework for the compliance staff. Luckily, we are laser focused on this, and have developed a capability framework covering both technical and non-technical skills. This article looks at the reasons why this is necessary and provides a structured path forward.

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June Update: Onward, ever upward

Smarter compliance. Welcome to the July 2019 update. We have big news. The financial service industry is highly regulated and surprisingly dynamic. Thankfully, the team behind our industry-leading compliance platform ensures openAFSL evolves even quicker. Regulators know that there’s a serious gap between what the law requires and what most Licensees manage to do - openAFSL helps you bridge that gap at a reasonable cost.

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Westpac and the Laws of (advice) Robotics

Smarter Compliance. The financial advice market is, depending on your perspective, either evolving or being disrupted. Technology - digital advice - presents a compelling alternative to the expense and risk of traditional distribution models. But, before we despair about the unfairness of replacing advisers with computers and algorithms (or celebrate the emergence of an objective and unbiased advice service) it’s important to appreciate that the models have similar issues and that while the nature of regulation may change, it’s as essential as it is now.

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Culture, capability and comparison

Smarter Compliance. Compliance used to be a simple process of ‘box ticking’ and commercial obstructionism but now it’s expected to embrace ethics, efficiency and ‘culture’. As the compliance function broadens its focus ,and secures its footing as a practitioner of a strategic management discipline, Compliance Managers are being asked to define or articulate the rules and values against which their business will be assessed. The difficulty is that it’s extraordinarily difficult to assess culture. This article provides eight points that might suggest a good compliance culture.

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Management and Consequence Management

Smarter Compliance. The Regulators’ focus on large institutions, and APRA’s self-assessment initiative, identified consistent deficiencies in the way Licensees respond to incidents, breaches and non-compliance. Consequence Management is not a complete solution (monitoring, supervision and remediation are equally important) but focusing on consequence management is an effective and efficient way to create and maintain a good corporate 'culture'. Properly applied, it may also spare you adverse publicity. 

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Where FASEA gets it right: Training and Competency

Smarter Compliance. Effective education and ongoing training is the bedrock of every profession. So how can an advice profession emerge from an industry that prefers validation and convenience over development, engagement and deliberate practice? In our view, it can’t. In this article, we explore Continuing Professional Development from a different perspective - the sustainability of advice businesses - and argue that FASEA are right to push for tailored, engaging and challenging CPD.

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APRA, risk and ‘boiling frogs’

Smarter Compliance. In May 2019, APRA released an Information Paper reporting on the results of self-assessments performed by 36 financial institutions. Focusing on governance, accountability and culture, the responses indicated that CBA is not an outlier and that the issues that exposed them to public and regulatory criticism, are also present in their competitors and peers. Perhaps, the only differences are time and orders of magnitude. This article references the report and offers suggestions to those Licensees hoping to improve their culture, governance and compliance framework.

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A Change is Gonna Come: ASIC in action

Smarter Compliance. ASIC’s report 615 “ASIC Enforcement Update July to December 2018” provides a snapshot of the prosecutions, bannings and investigations they undertook. It’s an impressive list but is, in our view, a low water-mark for 2019 activity. With increased funding, a bigger and better toolkit and a renewed willingness to act, ASIC seem to be better positioned to effectively, efficiently and consistently regulate the financial advice industry. Expect a king-tide of regulatory activity in 2019.

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