TheAustralian Securities and Investments Commission (ASIC)has imposed an additional condition to the dealers’ licence ofLifespan Financial Planningfollowing concerns over the group’s disclosure and compliance procedures.
While undertaking surveillance of Lifespan, ASIC found the frequency and level of disclosure to clients of entry fees and trailing commissions was inadequate and in some cases inaccurate.
The regulator was also concerned over whether Lifespan advisers adequately disclosed to clients the portion of commissions they would receive and whether the group undertook adequate monitoring and compliance reviews of advisers.
ASIC director of financial services reform Sean Hughes says its surveillance of Lifespan raised significant consumer protection concerns.
The new licence condition will require Lifespan to appoint an independent consultant to conduct reviews of compliance monitoring and reporting systems for advisers.
Lifespan has to take action in response to any adverse findings of the consultant, who will report to ASIC at six-monthly intervals for a total of 18 months.
The action follows an enforceable undertaking given by financial planning dealer groupRetireInvestlate last week, after ASIC surveillance of the group unearthed problems with its disclosure, compliance, internal complaints handling and needs analysis procedures.
As part of the undertaking, RetireInvest was also required to appoint an independent compliance consultant to review its systems and procedures.
The actions against the two dealer groups follows the release by ASIC, in conjunction with the Australian Consumers Association (ACA), of an unflattering report into the financial planning industry.
“Given current concerns in the market about the standards of certain sections of industry it is appropriate that we take these actions at this time,” Hughes says.
