ASIC concerned about AFS Group's financial advice
The financial services regulator has raised several concerns with respect to advice provided at the Australian Financial Services (AFS) Group, and will impose additional license conditions on the dealer group.
The Australian Securities and Investments Commission (ASIC) undertook a six-month surveillance of the AFS Group, which included a review of client files to examine the appropriateness of financial advice given, as well as the dealer group's ability to handle complaints and conflicts of interest.
ASIC raised concerns about the group's management of conflicts of interest in relation to "advice recommending clients switch their investments to financial products associated with and/or related to the licensee".
The regulator also identified compliance issues when "advice recommends replacement of one financial product with another"; the group's dispute resolution system and its supervision of staff and representatives were also questioned by ASIC, according to the regulator's announcement.
As a result, AFS Group has agreed to engage an independent expert to review and make recommendations regarding its compliance practices, processes and resources, according to ASIC.
ASIC Chairman Greg Medcraft said investors must be able to confidently rely on the accuracy and appropriateness of information provided by financial services.
"All Australian financial services licensees are gatekeepers, and are expected to properly manage and supervise their representatives and employees, and make sure conflicts of interest are managed or avoided and client complaints are dealt with promptly," Medcraft said.
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