Posts tagged Advice
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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Care Factor?: FASEA's view of "Client Care and Practice"

Smarter Compliance. Professional advisers understand that they’re now required to commit to a programme of Continuing Professional Development (CPD) that is consistent with FASEA’s requirements to “develop, maintain and apply a high level of relevant knowledge and skills”. Standard 10 of the FASEA Code of Ethics articulates expectations reinforced by FASEA’s FPS004 CPD Policy outlining mandatory competency areas. One of those competency areas is “Client Care and Practice”. We’ve been deluged by advisers asking what this means in practice. In addition to offering Licensees a practical perspective this article outlines how an innovative reg-tech compliance platform, OpenAFSL, can optimise their approach.

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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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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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April Update: Coaching, comparison and clarity

Smarter compliance. Welcome to the April 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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Our Gap Year: Comprehension, Compliance and Capacity.

Smarter Compliance. In March 2019, ASIC released Report 614 titled “Financial advice: Mind the gap” summarising their research into consumer understanding of the differences between general and personal advice. No responsible licensee would be surprised to learn that ASIC’s research identified “substantial gaps in consumer comprehension”. These weren’t the only gaps that concerned ASIC and this article also considers ASIC’s response to AMP Financial Planning and SMSF Advisers Network.

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Bridging the Gap: Best Interests and formal compliance

Smarter compliance. Best Interests. Safe Harbours. Client Priority. All the drama with the Royal Commission has distracted attention from the only issue that really matters - To what extent are advisers acting in their clients’ best interests. The short answer from us is that the best advisers have never wavered from their ethical and professional commitment to act objectively in the interests of their clients. For these advice professionals, the best interest duty, simply reconfirmed their approach to advice, service and care. This might not be the case for all advisers. This article explores these issues with reference to both the #BankingRC Final report and Hub24’s excellent 2019 report “The Adviser’s Best Interests Duty: Creating Better Advice.”

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Insurance within SMSF: Five key considerations

Smarter compliance. In a previous newsletter, we addressed five common errors  in Self-managed Super Fund advice. We also included some frightening statistics surrounding the level of trustee knowledge, and the adviser’s role in the advice process. In this article, a former adviser draws on his experience to nominate five critical considerations (and accompanying ballads) that deserve closer consideration.

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Change or be changed: The challenge for advice

Smarter Compliance. This year will be a challenging and momentous year. Change may be inevitable and irresistible, but it needn’t be fatal. The better licensees and advisers have already separated themselves from the pack and started to transform themselves to succeed in the new environment. This article explores what they’re doing and how they’re doing it. Don’t be left behind.

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Getting to the right place: Research and Approved Product Lists

Smarter Compliance. The business of financial advice is hard. In addition to a range of legal and professional obligations, the complexity of individuals’ specific needs and the challenge of regulatory arbitrage, Licensees and Advisers are expected to be well-informed about an ever increasing number of financial products and platforms. Consistently providing appropriate financial product advice is an insurmountable challenge unless the Licensee has an effective research process and a well constructed APL. In this article, we answer a user’s questions on the role and use of the APL.

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"It's the end of the world as we know it": Three reasons to celebrate

Smarter Compliance. 2018 might have been an embarrassing, dramatic and traumatic year for the financial services industry (and the Commission’s Final Report is yet to come) but Compliance Professionals have had enough ‘gloom and doom’ for the moment. As 2019 lurches forward, we identify three ways that 2019 could be a very good year for compliance staff. Sure, you’ll still be over-worked and misunderstood but you may also start to be appreciated and valued. Work smart, seize these opportunities and you’ll transform your role and increase your influence. Good luck.

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Why most SMSF advice sucks: Five common errors

Smarter Compliance. Since their introduction in 1999, the popularity of the SMSF has remained relatively constant despite the ups and downs experienced within the share market, housing market and industry. We review a lot of advice. While our experience with SMSF doesn’t entirely accord with ASIC’s view that 90% of SMSF advice is ‘poor’, we have noticed some common issues in the advice we have reviewed. This article discusses five elements you need to address to ensure that your SMSF advice doesn’t “suck”.

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The examined life: FASEA, facts and the future of advice

Smarter Compliance. We are now on the eve of the implementation of the Corporations Amendment (Professional Standards of Financial Advisers) Act. FASEA and this legislation will significantly change the training, education and ethical standards for financial advisers and reshape the advice profession. This article explores the significance of the proposed change in education standards, maps out the practical differences and draws on similar examples to highlight the facts that advisers will need assured support to weather these changes.

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Advice, file-notes and adverse inferences

Despite the emphasis on regulated documents, and the increasing use of technology, advice has an oral foundation. Unfortunately, memory is imperfect. In reality, a failure to appropriately document client conversations, answers or agreements can challenge your credibility and expose you to additional risk. Poor file-noting may not be fatal for you, but in the event of a claim or dispute, courts may draw adverse inferences from scant or non-existent file-notes. This article addresses these risks and suggests ways you can avoid undercutting your professionalism or prejudicing your defence.

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September Update: Connections, Conduct and Coding

Smarter compliance. We live in interesting times. While many participants are intimidated by the Royal Commission and ASIC’s Report 594, we just kept coding to ensure that OpenAFSL continues to deliver on its promise. We crushed it in September. The full list of tweaks, enhancements and innovations would overwhelm you but, in this article, we’ll cover some of the main ones.

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Adviser Q&A: Product Replacement

Smarter compliance. Good advice, as Sean Graham explains, demands solutions driven by the clients’ best interests and supported by the adviser’s bona fide consideration of alternatives. Very poor advice, in my experience, often fails to prioritise the clients’ interests. Poor advice, on the hand, often results from a failure to rigorously, efficiently or fairly considering options. The safe harbour steps require advisers to research products they’re recommending as replacements (and those they’re recommending to be replaced) but some advisers still struggle with the requirement. This article answers some of the questions we get from advisers on product replacement.

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“Welcome to McDonalds”: Five Take-outs for advisers

NSG v ASIC aside, financial planners often struggle to find cases that clearly address their legal obligations and duties. Thankfully, McDonald v AMP Financial Planning Pty Limited [2018] QSC 195 addresses both the practice and process of financial planning and, as a consequence, highlights expectations that advisers need to adequately consider in their own businesses. Here we look at five key take-outs from McDonald’s case.

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The writing’s on the wall: ASIC enforcement and focus

With the first half of the year now behind us, ASIC have recently released REP 585 (ASIC enforcement outcomes: January to June 2018). It highlights their activity in early 2018 (focusing on some notable successes) and looks forward to hint at what we can expect from them in the next six months. This article focuses on the report, ASIC’s plans for the remainder of 2018 and what they mean for Licensees and advisers.

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August Update: Ready to Spring

If you're focused on the future, and want to build a sustainable advice business, you'll want to find out more about openAFSL. You know that “minimal or technical compliance with the law” is not a worthwhile pursuit and, as a competent Licensee, you understand that regulatory technology is critical to you achieving that goal. OpenAFSL is the flexible and intuitive platform you need. Here’s why.

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ASIC and the limits of disclosure

Licensees and advisers have traditionally relied on disclosure as the solution for a range of regulatory, advice and legal risks. The fundamental problem is that disclosure is a spectacularly ineffective consumer protection mechanism. In the context of the Banking Royal Commission, both the Government and ASIC are focusing on trust, transparency and accountability as better alternatives to disclosure and equipping ASIC with the powers it needs to be active, feared and effective. In this context, the course of action for licensees and advisers is clear - less disclosure, more clarity.

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