Posts tagged Compliance
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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You're right, "Compliance" is (still) the problem

Smarter Compliance. As easy as it has been to highlight the ignorance and arrogance of some advice ‘leaders’, the reality is that their failings may have been exacerbated by compliance functions that were impotent, ignorant or lacking in courage. In fact, ASIC might add ‘compromised’ as a defining feature of some of these compliance functions. The sad truth is that ASIC was not alone in its criticism of compliance functions; both APRA and the Banking Royal Commission have echoed similar concerns and highlighted a need for the transformation of ‘compliance’. This article considers how burgeoning expectations about competency, capability and courage should apply to your compliance function.

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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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What a Year. A summary of achievements and refinements.

Smarter Compliance. Happy New Year. 2018 was a challenging year for many Licensees but, for all its tension and drama, it highlighted problems that openAFSL solves and introduced new issues that we had anticipated. While others were caught flat-footed, our reg-tech platform quietly deployed the solution they needed. There’s still time for you and we’re happy to help. Call or email us to learn how OpenAFSL can ensure that you act “efficiently, honestly and fairly” in 2019.

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An argument for unification: why risk and compliance should be joined

Smarter Compliance. For all their obvious similarities, Compliance and Risk Management are two management disciplines demarcated, fundamentally, by arbitrary distinctions, assumptions and biases. As appealing as the status quo may be to existing players, the Banking Royal Commission has highlighted the desperate need for licensees to take compliance and risk management seriously and build effective and efficient functions. The best approach might be to combine them . This article examines the obstacles in the way of a building an effective CGRM function and the reasons to do so quickly.

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Reasonable Steps: Licensee obligations and regulatory risk management

Smarter compliance. Section 912A(1)(a) of the Corporations Act requires a financial services licensee to “do all things necessary to ensure that the financial services covered by the licence are provided efficiently, honestly and fairly”. As we’ve seen from the Banking Royal Commission, this is neither verbiage nor aspirational sentiment but a compendious expectation that requires consistent and demonstrable competence, capability, efficiency and integrity. It’s also an obligation that the law expects to apply equally to the Licensee and their representatives. This article moves from the specific case of ASIC v Financial Circle to the reasonable compliance arrangements expected of licensees.

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The Great Divide: RG146, training and education

Smarter Compliance. In this guest post, education expert, Angelique Aksenoff, introduces the great divide in competency standards and asks “what will happen to RG 146 and Tier 2 advisers with the uplift to financial adviser education and training standards?”. Identifying that shifting Tier 2 standards will have a far more profound impact than many anticipate, the author explores the challenges and likely consequences of these essential reforms.

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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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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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Adviser Reviews: You can be the best

One of the most surprising insights from completing hundreds of adviser reviews, is the relatively small number of advisers who are interested in moving 'beyond compliance'. The challenge is compounded by risk. Some licensees use compliance results as part of a balanced scorecard or as the basis for bonuses and promotion. So improving the quality of advice, and getting a better review result, has additional benefits. Assured Support's risk and conduct-based methodology expects compliance and rewards quality, so to help make your journey a little easier, we'll share seven steps you should take to achieve better review results. 

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Industry recognition: Compliance and Thought Leadership

The ifa Excellence Awards are the only program benchmarking the success of the independent advice sector in Australia. In fact, most advisers regard ifa as the most trusted source of financial services news. We appreciate ifa recognising us for our thought leadership and other work - Compliance. Risk Management. Licensing. Adviser Reviews. Advice Coaching. Licensee Reviews. Due Diligence. Technology. Investigations. Remediation. Workshops. Dispute Resolution. Training. Policies and Standards. Presentations. 

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June Update: EOFY Specials

It's been a busy quarter for openAFSL. In addition to our usual program of continuous improvement, our capability has been bolstered by Kye's decision to help us free licensees from the burden of compliance. We're glad she's joined us to support the platform, help our clients and train our users to get the most out of openAFSL. This post addresses the key changes made in June SPOILER WARNING #Colour

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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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Last man standing: "Bloody but unbowed"

It’s hard not to read recent media coverage of our industry without anticipating a fundamental shift in advice. New education changes, a renewed focus on conflicts and a regulatory challenge to the ongoing service model that underpins the entire industry. While media focus on the institutional players, this article discusses the impact on, and opportunities for, professional advisers in the post-Royal Commission environment.

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Seven questions about your perfect solution: the reality of regtech

If you’re running an advice business, you know that you are required to establish and maintain sufficient measures to ensure your compliance with financial services laws. Clearly, the sophistication of the measures, processes and procedures you have in place (which may be paper based or integrated IT systems) will vary according to the size and sophistication of your business. In our view, the only way to comply consistently, effectively and efficiently in a complex and frequently changing environment is to embrace regulatory technology. Before you do, there are seven questions we think you should ask.

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Building in 'best interests' and better supervision

Since 2012, the Industry struggled first to understand, and then to operationalise, the 'best interest' duty. While the majority of Licensees eventually embraced this fundamental new duty, some participants failed spectacularly. In a previous article we suggested that competent AFSL should review their compliance arrangements in the wake of ASIC v NSG and ASIC v WRM. This article addresses where to start.

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Ineffective compliance: 'best interests' and supervision

Smarter Compliance. Since 2012, the Industry struggled first to understand, and then to operationalise, the 'best interest' duty. While the majority of Licensees eventually embraced this fundamental new duty, some participants failed spectacularly. This article considers how competent AFSL should review their compliance arrangements in the wake of ASIC v NSG and ASIC v WRM.

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Compliance Insights: Lessons from REP515

ASIC Report 515 "Financial advice: Review of how large institutions oversee their advisers" addressed how "effectively Australia’s largest banking and financial services institutions oversee their financial advisers". In a previous article "Who watches the watchers" we focused on cultural and structural reasons for the problems ASIC identified. This post focuses squarely on the practical lessons one can extract from REP515.

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