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The perils of safe harbours

The safe harbour provisions were intended to provide advisers with clarity about how to satisfy their best-interest duty, instead they have compromised it. In practice, checked steps and repeated commitments “to act in the client's best interests” are substituted for any real attempt to act in the clients’ best interests. Licensees, and advisers, obsessively focus on the “safe harbour” provisions, and how to demonstrate how their advice is in the client’s best interests, rather than obsessively focussing on providing advice that is, in fact, in their clients’ best interests. Safety, and better advice, requires advisers to set a new course. 

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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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Five reasons Compliance is "meh"

If you work in financial services, you understand that bored indifference, feigned interest, and eye-rolling are common reactions to most "Compliance" conversations. The brutal reality is that for most people, Compliance is simply “meh” - uninspiring, undesired and unexceptional. That's a bitter pill to swallow, but changing perceptions starts with first acknowledging the reasons why compliance elicits this reaction.

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You’re right, “Compliance” is the problem.

While it may not be immediately obvious, the embrace of “rules-based compliance” and its obsession with meeting (but often failing to meet) the letter of the law, has also shackled an emerging advice profession to incentives, legacies and values that have restricted its maturation. So what is the better alternative for advisers and licensees?

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The Compliance Audit: Ten "red flags" for Reviewers

Despite the recent coverage, there’s no fraud epidemic in financial services; but it’s inarguable that the increased reporting undermines public confidence in the advice profession. Licensees (and advisers) need to do more to detect, prevent and mitigate adviser fraud. Here are ten "red flags" for which you should look.

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