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.
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.
Smarter compliance. If you were registered on the adviser register prior to 1 January 2019, and preparing for the exam or the qualification, you’ve been given a temporary reprieve. The Assistant Minister for Financial Services, Superannuation and Financial Technology, Jane Hume, has thrown you a lifeline by announcing a 2-year extension for the FASEA qualification to 1 January 2026, and a 1-year extension for the FASEA approved exam to 1 January 2022. This article explores the deferment and its practical impact. It even offers practical solutions for those advisers hanging on by their fingertips and wondering how to move forward.
Smarter Compliance. The US Department of Justice asks three fundamental questions when reviewing corporate compliance programs 1. Is it well designed 2. Is it implemented effectively 3. Does it work in practice. We believe that local Regulators take a similar approach and this underpins our conviction that regulatory technology - like OpenAFSL - is the future of advice. You may have a different view but this article contains arguments that should convince any reasonable Licensee that we’re right.
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.
Smarter Compliance. After months of apprehension and uncertainty, almost 600 advisers sat the inaugural FASEA exam and over 90% passed. This result would normally be interpreted as a positive one, but many people have simply seized on the result and dismissed the exam entirely. The high pass rate may be reassuring, disappointing, both or neither but there’s a high chance that it can be misleading. This article explains why most advisers should continue to prepare for a challenging examination of their knowledge and capability.
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.
Smarter Compliance. One of the critical failures of the compliance function is its tendency to identify and publish failures rather than promote and encourage better practices. Their reasons are understandable, but focusing on failures does a disservice to those advisers looking for practical ways to exceed minimum standards. In a break with Compliance’s standard operating procedure, this article will focus on five ways that advisers transcend compliance. Based on our review of 3,000 advice files, we’ve identified the consistent and considered practices great advisers adopt.
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.
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.
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.
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.
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.
Smarter Compliance. Artificial Intelligence and machine learning have had less immediate impact than some participants predicted, but they're also likely to have a more profound impact over time than other participants expect. If you’re fascinated by AI but terrified of Skynet, these reports may provide you with the reassurance and false confidence you need.
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.
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.
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.
Smarter Compliance. Some advisers seem to fear the FASEA exam even more than the inevitable Zombie apocalypse. Their apprehension is understandable but only legitimate if they ignore their deep, practical understanding of the the financial services laws and the challenges of dealing with retail clients. Any adviser currently authorised by a responsible Licensee should have the the knowledge and the practical wisdom they need to satisfy FASEA. This article addresses advisers’ apprehension and provides some tips for managing it.
Smarter Compliance. We understand the apprehension felt by Responsible Managers, Directors and Line Managers. With all the usual disclaimers and qualifications, we offer this brief summary of our understanding of the obligations, risks and liabilities. We’d love to hear your views.
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.
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.
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.
Smarter Compliance. Your client’s goals and objectives are the foundation on which great personal advice is built. Unfortunately, they are too often confused, used incorrectly or relegated in importance behind a client’s risk profile. This article explains the difference between Goals and Objectives and provides some simple tips to avoiding common failures.
Smarter Compliance. FASEA Code of Ethics is more a “set of principles and core values” than detailed rules, but it’s a principles based model that provides the parameters for ethical and professional conduct. It’s driven by admirable intent but the ambition and inchoate aspirations of the Code of Ethics threatens the sustainability of the profession it hopes to shape and confirm. This article ponders the inconsistency between the laws and the Code and highlights three ways that its more impractical provisions may affect the emerging advice profession.
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.
Smarter Compliance. In the current environment of declining margins, increased scrutiny and looming transformational change, it’s sometimes challenging to maintain enthusiasm and momentum. The key to both is being properly prepared. In a changing and complex environment, the secret to success is assured support. In this article, we offer you three resources that provide three compelling reasons to review, refine and improve your compliance arrangements. Take the opportunity now. If you need help, reach out.
Smarter Compliance. In a previous article we discussed Continuing Professional Development requirements under the Financial Adviser Standards and Ethics Authority (FASEA). In this article, we’re focusing on qualifications and, in particular, the completion of a bachelor or higher degree, or equivalent qualification, approved by the standards body. FASEA’s requirements appear deceptively simple, but the path to compliance with their requirements can conceal dead-ends, reversals and unanticipated complexity. Assured Support can guide you through.
Smarter Compliance. On 22 February 2019, Treasury released exposure draft legislation titled Treasury Laws Amendment (Ending Grandfathered Conflicted Remuneration) Bill 2019 which, if ever introduced, passed and enacted, will prohibit the payment to financial advisers of grandfathering conflicted remuneration. These amendments could have a significant effect on the advice industry. However, there’s still time for consultation, so this article summarises the key issues and the challenges posed by the proposed regulations. It’s no substitute for specific legal advice, but it’s considerably cheaper and more accessible.
Smarter Compliance. 2019 is shaping up to be a great year for financial services lawyers, business brokers and stress counsellors. Advisers have long accepted that the financial services industry is highly regulated and frequently changing, but the sheer scale and speed of reforms planned for 2019 is potentially overwhelming. We can’t do much about the rate of change, but we can alert you to the recently released Consumer Data Right rules, warn you about proposed changes to the Privacy Act to better protect (vulnerable) consumers and prepare you for the impact of new Design and Distribution obligations.
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.