The latest Market Supervision Report released by the Australian Securities and Investments Commission (ASIC) has revealed the degree to which less than adequate practices by securities dealers could be seen to outweigh many of the failings attributed to financial planners.
The ASIC report has served to not only detail securities dealers who have given inappropriate advice, but who have offered margin lending facilities without actually being licensed.
The report said ASIC had “continued to identify securities dealers who are failing to adequately supervise their representatives – in particular, by not adequately monitoring whether they are providing clients with appropriate personal advice”.
“As a result of such inadequate supervision, we have observed cases where a client’s circumstances (particularly their risk tolerance and product understanding) have not been adequately considered.”
The ASIC report said the securities dealers it had identified had agreed to increase their level of supervision, particularly where their representatives’ recommendations included more complex products or services.
It said that in other matters, it had identified an example of a securities dealer offering margin lending services without the necessary AFS licence authorisation.
“We are working with this licensee to bring it into compliance and to protect its clients,” it said.
“We also identified an example of a securities dealer who continued to operate while in breach of the requirement to have adequate financial resources to provide the services for which it was authorised. The securities dealer in this instance has voluntarily relinquished its AFS licence.”
