Australian regulator imposes extra conditions on AFS license of HNW Planning
A surveillance by ASIC has found that HNW was not adequately monitoring and supervising its representatives and that its audit processes were deficient.
The Australian Securities & Investments Commission (ASIC) today announces the imposition of extra conditions on the Australian financial services (AFS) licence of HNW Planning Pty Ltd, a company whose services range from investments to pension planning.
The regulator action follows a surveillance by ASIC, which found that HNW 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. After the broader surveillance, 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.
ASIC expects advice licensees to have robust audit processes in place. They should conduct sufficient periodic audits of all advisers, involving reviews of complete advice files, and use suitably qualified and trained staff to conduct these audits.
ASIC says that, under the Corporations Act, it has the power to impose additional licence conditions. HNW has the right to seek a review of ASIC’s decision at the Administrative Appeals Tribunal.
The imposition of additional licence conditions on HNW is part of ASIC’s ongoing efforts to improve standards across the financial services industry.
Just several days ago, the Australian watchdog imposed additional conditions the Australian Financial Services licence of Kaz Capital Pty Ltd, a company whose services range from investment advisory to wholesale investing in precious metals. ASIC explains that it is concerned about the adequacy and effectiveness of Kaz’s compliance framework, including how it monitors its advisers and whether it meets its compliance obligations under the Corporations Act.