The Australian Securities and Investments Commission (ASIC) has imposed additional conditions on the financial services licence of a group which offers mortgage help, as well as other financial planning and credit advice.
Following surveillance of HNW Planning Pty Ltd, ASIC found the group was not adequately monitoring and supervising its representatives and that its audit processes were deficient.
An initial ASIC surveillance of one of HNW’s authorised representatives led to a broader surveillance of HNW.
Following this, ASIC concluded that HNW did not have adequate monitoring and supervision processes in place to identify non-compliance by its authorised representatives or to ensure that they complied with the best interests duty and related obligations.
The additional licence conditions imposed by ASIC require HNW to engage an independent expert to make recommendations on how to improve HNW’s monitoring and supervision processes.
The independent expert will then test and report on the effectiveness of the improvements made by HNW.
AFS licensees are responsible for the conduct of their representatives, and ASIC expects licensees to have effective monitoring and supervision arrangements in place to ensure their representatives comply with the law when providing financial product advice to consumers.
Licencees are required to conduct sufficient periodic audits of all advisers, involving reviews of complete advice files, and use suitably qualified and trained staff to conduct these audits.