ASIC imposes conditions on dealer group licence
The financial services regulator has imposed additional conditions on Lionsgate Financial Group's financial services licence, after conducting a surveillance of its advice business.
The Australian Securities and Investments Commission (ASIC) found Lionsgate did not properly assess its advisers' competence to provide financial services, nor did it take reasonable steps to ensure the advisers complied with the laws.
Furthermore, the regulator was concerned that the dealer group did not maintain sufficient resources to carry out supervisory arrangements, have adequate measures in place to meet its record-keeping obligations and implement effective audit programs.
Lionsgate has 103 financial advisers, after significantly increasing that number over the past three years.
To keep its licence, Lionsgate will have to appoint an independent expert to review all aspects of the licensee's arrangements for compliance with its general licensee obligations.
The expert will report to both Lionsgate and ASIC and provide recommendations which Lionsgate will be required to implement. The expert would also review some instances of advice provided to clients and determine whether the advice complied with the law.
ASIC Commissioner Peter Kell said the additional conditions were designed to guide Lionsgate in putting in place a compliance framework that ensures the advice provided is of the required standard.
"Licensees are responsible for the conduct of representatives that they appoint," Kell said. "It's very important that they have adequate supervisory arrangements in place to identify and address advice deficiencies quickly."
ASIC will continue to monitor Lionsgate's compliance for two years.
Recommended for you
ASIC has launched court proceedings against the responsible entity of three managed investment schemes with around 600 retail investors.
There is a gap in the market for Australian advisers to help individuals with succession planning as the country has been noted by Capital Group for being overly “hands off” around inheritances.
ASIC has cancelled the AFSL of an advice firm associated with Shield and First Guardian collapses, and permanently banned its responsible manager.
Having peaked at more than 40 per cent growth since the first M&A bid, Insignia Financial shares have returned to earth six months later as the company awaits a final decision from CC Capital.
