A West Australian financial services company has been slapped on the wrist by ASIC and forced to bring in a compliance expert. What can you learn from their mistakes?
Financial advice business Addwealth Financial Services Pty Ltd was the subject of ASIC surveillance which resulted in additional conditions being imposed on its Australian financial services (AFS) licence – including taking on a compliance consultant.
ASIC was concerned that Addwealth – who provide advice on products and services including retirement planning and strategies, superannuation and rollovers (including strategies), self-managed superannuation, share market investments and managed funds –may have failed to provide advice that was appropriate to certain clients in light of their circumstances.
The regulator was also concerned that Addwealth may have failed to have in place adequate arrangements for the management of conflicts of interest.
As part of its conditions, Addwealth has appointed an external compliance consultant who will regularly report to ASIC over the next 15 months.
The consultant will test and report on matters including Addwealth’s overall compliance arrangements and the quality of financial product advice provided to its clients. This includes the advice given with respect to their investment in the Addwealth Achiever Fund.
ASIC Commissioner Peter Kell said the regulator will seek the imposition of more onerous licence conditions and independent oversight where there are concerns advice may not be meeting required standards.
ASIC acknowledged that Addwealth agreed to the appointment of the consultant to identify and address their compliance issues.