The Financial Services and Credit Panel (FSCP) has made two determinations, one regarding possible breaches of conflicted remuneration and the second about non-compliance with CPD.
The first case was referred to the FSCP as there were concerns that the adviser had breached conflicted remuneration and best interest duty within the Corporations Act and had breached the code of ethics.
This was in relation to personal advice given by the relevant provider to two retail clients between October 2018 and September 2022 inclusive.
In an update, the FSCP wrote it had decided to take no action against the individual, having considered submissions from the individual.
“The sitting panel has decided not to take any action against the relevant provider. The matter was referred to the sitting panel due to concerns that the relevant provider contravened sections 946B, 961B(1) and 921E(3) of the Corporations Act 2001 in relation to personal advice given to two retail clients between October 2018 and September 2022 inclusive.
“The sitting panel considered submissions from the relevant provider and decided to not to take any action.”
The second, made two days later, related to a relevant provider where the panel was concerned it had failed to comply with continuing professional development requirements. Advisers are required to complete 40 hours each year.
However, it took no action as the relevant provider was able to provide evidence that they had exceptional circumstances.
“The relevant provider gave the sitting panel information and material which satisfied the sitting panel that there were exceptional circumstances that led to the noncompliance, and that the relevant provider understood their CPD obligations.”
This is the fourth and fifth time that the FSCP has opted to take no action against a relevant provider.
Most recently, in February 2024, the panel said it was “not satisfied” that the relevant provider had contravened the Corporations Act when they allegedly failed to demonstrate how the more expensive recommended product, which was described in the statement of advice as having low fees and being cost-effective, would benefit the client.
In October 2023 the sitting panel considered a case where the individual had breached the code of ethics and did not act with integrity when they had clients sign blank off-market transfer forms which the relevant provider then photocopied and completed to transfer multiple securities.
However, when considering extraneous factors and the significant remedial steps taken by the licensee, it decided not to take further action.
In the first example of no action being taken, in September 2023, the FSCP did not take action as it considered the relevant provider “could have done more” when giving retirement advice to superannuation fund members, but that the actions did not “warrant action such as warning or reprimand”.
The most recent determination where an action was taken was in August, in relation to an adviser’s use of a record of advice after providing personal advice rather than a statement of advice. In this case, a warning was issued to the relevant provider.
“The circumstances of the contravention were that between February 2022 and November 2022, the relevant provider gave records of advice to clients in reliance on statements of advice that had been given to the clients by a different providing entity,” the panel stated.
