The Australian Securities and Investments Commission (ASIC) has accepted an enforceable undertaking (EU) from Commonwealth Financial Planning (CFP).
ASIC chairman Greg Medcraft said "this EU is significant as it requires CFP to comprehensively examine its risk management system to ensure non-compliance issues will be detected at the earliest possible stage and remedied".
The EU follows an investigation from ASIC into the provision of advice by some of CFP’s financial advisers, ASIC stated.
Under the EU, CFP will develop an implementation plan to address any unresolved deficiencies identified by the assessment of its risk management framework, ASIC stated.
The implementation of the plan will be the subject of review and ongoing reporting to ASIC over the next two years by an ASIC-approved independent expert.
The review will address whether there are adequate processes and controls in place to deal with ongoing risks of non-compliance; whether representative misconduct has been dealt with in a consistent manner; and if recurring themes have been appropriately identified.
It will also address data analysis processes and reporting capabilities allowing for early detection of advice process irregularities; whether there have been adequate controls over client records; and if there has been consistent application of CFP’s complaints-handling and internal dispute resolution processes, ASIC stated.
