Posts tagged Advisers
Compliance Basics: Ask before you authorise

Smarter Compliance. You may be aware, and the Royal Commission confirmed, that some Institutional Licensees appointed advisers that a more prudent Licensee would not have appointed. The difficulty, we were told, was that before the ABA published their 2018 protocols, there was no agreed process for reference checking. This post doesn’t dwell on the credibility of some licensees’ failures to adopt HB 322-2007 “Reference Checking in the Financial Services Industry” but instead offers three resources that might help those licensees committed to acting efficiently, honestly and fairly.

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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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Compliance Reviews: Livin' on a prayer

Smarter compliance. For over ten years, in various iterations, we've worked hard to develop a credible and fact-based alternative to institutional box-ticking. Abandoning the bureaucracy and arbitrary classifications so loved by institutional licensees, we pioneered reg-tech and built a consistent and predictable risk and conduct-based methodology that embeds transparency, comparability and granularity. We appreciate that the "sweet science" of compliance is not for everyone, but everyone can benefit from a little more knowledge. Addressing three "key myths" might not change your life, but it might provide the context and reassurance you need. 

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The challenges of growth: recruitment and reference checking

As a Licensee, you operate in a commercial environment subject to a range of legal, moral and social obligations. You, and the advisers you authorise, routinely act and make decisions that can significantly impact the lives and circumstances of your clients. As focused as you may be on growth, you need to discriminate; you cannot simply recruit without investigating, and assessing, the people you propose to authorise. Nor can you simply make a decision on the basis of information you have at hand or that offered to you by the potential recruit. This article outlines some practical ways to manage recruitment risks and access to some tools that might assist you.

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"Regrets, I've had a few": The risks and opportunities with appointing advisers

As the Banking Royal Commission has highlighted, advisers have generally enjoyed unfettered mobility between licensees; neither their compliance, conduct nor capability have provided any real obstacle to determined licensees focused on growth. The obvious limitations of this approach are commemorated on the ASIC website and in Rep515, the Regulator’s  recognition of “inadequate background and reference-checking processes” and releases on strategic changes and cancellation of licenses. This article proposes five steps to minimise the risks and costs of adviser recruitment.

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Don't do all the dumb things: Look (twice) before you leap

One of the biggest decisions made as an adviser will be choice of Licensee. The recent closure of Dover may not have come as a surprise, but the speed in which it occurred still came as a shock to many observers. As we have previously argued, choosing the right Licensee is perhaps the most critical decision an adviser needs to make. This article explores the questions advisers should ask of their prospective licensee and identifies the signs by which an adviser can identify the right time to leave their current licensee.

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It's the elephant again: Vertical integration and conflicts of interest

Vertical integration isn't necessarily a problem but successive ASIC reports tend to suggest that it is. Report 562 casts shade both on vertically integrated advice businesses and the effectiveness on their compliance resources. Report 562 summarises ASIC's review of "Australia's largest banking and financial services institutions" and notes that 75% of the advice reviewed was "non-compliant advice". Read the report to understand how vertical integration, the elephant in the room, needs to be addressed if an advice profession is to emerge.

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Don't look back in anger: Insights from a former adviser

In reality, financial planners and compliance reviewers have more in common than they realise; both understand the value of advice and both are committed to building an advice profession. I know this to be true because I've done both roles. Here are the lessons I learnt when transitioning from financial advice to regulatory advice and compliance. Don't look back in anger.

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Hanging out with Nudists: Data, Tech and the Privacy Act

In Australia, 12 March 2014 marked the commencement of a more robust privacy regime for businesses and organisations as changes to Privacy Act 1988 commenced. From this date 10 National Privacy Principles and 11 Information Privacy Principles were harmonised into 13 Australian Privacy Principles. Heralded as “the most significant privacy reform in 25 years” the practical impact of these changes varied significantly across the financial services industry. This article outlines the context of these changes and practical steps for compliance with the new APP.

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