Financial planning licensees are facing more onerous record-keeping responsibilities under draft advice remediation guidance issued by the Australian Securities and Investments Commission (ASIC) today.
The draft guidance, issued within a consultation paper, draws in large part on ASIC’s recent experience in dealing with advice remediation processes such as that implemented by the Commonwealth Bank and makes clear that higher standards will be required of licensees.
Pointing to the greater licensee responsibility for comprehensive record-keeping, ASIC said that it had recently identified that, in some cases, client remediation would be facilitated by clearer record-keeping obligations for AFS licensees that provide personal advice.
Importantly, the ASIC proposals would see licensees required to be able to provide access to records, even if those records are held by authorised representatives or advisers no longer working for them.
“…our regulatory experience has highlighted difficulties in recent review and remediation programs where the advice licensee no longer has access to client records to determine whether or not affected clients have suffered a loss,” the ASIC discussion paper said. “This means that many clients are disadvantaged because the advice licensee does not have access to records to enable them to review the advice given to these clients.”
“The obligation to retain records remains with the advice licensee. For the avoidance of doubt, we propose to amend [the regulations] to clarify that licensees must have access to the records during the period in which they are required to be retained—even if the records are retained by another person and that person is no longer authorised by, or related to, the licensee.”
