The Financial Services and Credit Panel (FSCP) has issued a written reprimand to a relevant provider after they failed to verify a client’s information regarding an account-based pension.
This action contravened s961B(1) and s961G of the Corporations Act 2001 in October 2024 as the relevant provider failed to verify if the client had previously commenced an account-based pension, which they had.
This advice then caused the client to exceed the transfer balance cap.
In reaction, the sitting panel of the FSCP said it was satisfied the relevant provider
The Sitting Panel was also satisfied that in giving the advice, the relevant provider contravened s921E(3) of the Corporations Act 2001 by failing to comply with the Code of Ethics’ Value of Diligence and Standard 5.
Standard 5 requires financial advisers to ensure all advice and product recommendations are in the client’s best interests and are appropriate to their specific circumstances, confirming the client understands the advice, its benefits, costs, and risks.
There have been 12 actions by the FSCP this year, a variety of written orders, written directions and reprimands. Only one action saw no action taken which was because the individual had taken prompt action to rectify the breach and there were extenuating circumstances.
The first half of the year was particularly active with determinations being double the volume over the same period in 2024 at nine actions compared to five.
In particular, ASIC urged financial advisers to ensure their CPD is up to date after multiple FSCP actions were taken for this reason.
Financial advisers are required to complete 40 hours annually across technical competence, client care and practice, regulatory compliance and consumer protection, and professionalism and ethics.
The FSCP is a pool of industry participants, appointed by the responsible minister, that ASIC draws upon when forming individual sitting panels. It operates separately from, but alongside, ASIC’s existing administrative decision-making processes.
A sitting panel will be convened by ASIC to consider certain suspected misconduct by, or circumstances relating to, a financial adviser such as if it reasonably believes a financial adviser is not a fit and proper person to provide advice or a financial adviser becomes insolvent under administration, and ASIC is aware of this.
