ASIC warns of civil penalties if advisers fail to register

ASIC commissioner, Alan Kirkland, has warned licensees and financial advisers that they could face civil penalties if they fail to meet the new extended deadline for adviser registration.

The deadline for advisers to register was extended from 1 February to 16 February in order to take into account the summer break after 4,000 advisers were found to not yet be registered.

Speaking to Money Management, Kirkland, who joined ASIC for a five-year term at the end of 2023, said this would be the final deadline and urged licensees to submit their registrations as soon as possible. He acknowledged there had been delays but said the idea had been discussed since 2021.

“We were conscious that it has opened before the holidays but it has also been known for some time, so we are encouraging that it is done ASAP. We had been waiting for the final piece of legislation to pass ,but that passed on 27 November, and we quickly opened our portal on 28 November, so it has been 11.5 weeks.”

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If licensees fail to submit their registrations on time, then he warned they will be in breach of the law if they continue to provide advice to retail clients. 

“It is really important for people to understand this that they will be in breach of the law and could be liable for civil penalty provisions. They cannot provide advice after the deadline until they have registered,” he said.

This echoes ASIC guidance that states: “A relevant provider giving personal advice while unregistered will be in breach of a restricted civil penalty provision and the relevant provider’s authorising AFS licensee(s) will have committed an offence of strict liability and contravened a civil penalty provision.

“The AFS licensees may be subject to regulatory action if they continue to authorise the relevant provider at the time they provide advice.”

As to what advisers or licensee should do next, Kirkland urged them to act promptly.

“There is very clear information out there, I would recommend having all your documentation process ready when you log onto the portal and then it is quick and straightforward.

“We are aware it is the start of the year, but if they can get it done before the year starts, then they can get on with the rest of the work for the year ahead.”

ASIC has said it will begin a program to check compliance and will take enforcement action if it identifies advisers who are providing advice while unregistered.

For self-licensed advisers, Brian Pollock, director of corporate governance at The Principals Community, said the organisation has been helping with their submissions to ensure they are correct. 

“We did an update for members in December that mapped it out for them and have been going online with licensees to help them with ASIC Connect because if the licensee isn’t across it, then it will be a breach. It worries me because so many people have been away on leave at this time of year so they might not remember.”