The Australian Securities and Investment Commission (ASIC) has imposed additional licence conditions on SMSF Adviser Network (SAN) due to its significant increase in adviser numbers in a relatively short period of time.
The regulator launched a surveillance under which it reviewed a number of SAN’s client files and identified that some of the company’s advisers “failed to demonstrate compliance with the best interest duty and related obligations”.
Also, ASIC found that client files often lacked evidence to support the advisers’ recommendations that clients established a self-managed super fund (SMSF).
As a result, the regulator believed that the firm had inadequate supervision process in place to ensure that advice provided by its representatives was in the best interests of clients.
Under the additional licence conditions, SAN would be required to “engage an independent expert to review and test the compliance of advice provided by SAN’s advisers.”
“When providing SMSF advice, financial advisers are required to adequately demonstrate why an SMSF is appropriate for the client and why it is in the client’s best interest,” ASIC said in a press release.
“ASIC expects financial advisers to use their skills, expertise and judgement in determining whether an SMSF is appropriate and not rely solely on client direction.”
The licence conditions were imposed by consent as a result of SAN’s engagement in addressing the concerns identified during the ASIC surveillance.