ASIC gets tough on complaints scheme requirement
More than 100 financial advisers are being chased by the Australian Securities and Investments Commission (ASIC) for failing to join a consumer complaints resolution scheme as a condition of their licence agreement.
The 116 advisers were discovered as part of the program by the investment watchdog which investigated 1520 advisers to ensure those that were licensed belonged to a scheme.
From October 1998, ASIC licensing conditions have required advisers to belong to an approved complaints resolution scheme, most commonly the Financial Industry Complaints Service (FICS).
"ASIC is not going to tolerate an ongoing breach of this licence condition," says Director of ASICs Office of Consumer Protection, Peter Kell.
Kell says the clamp-down on advisers who breach ASIC regulatory conditions comes after the results of a campaign to improve compliance within the financial advisory sector were released.
As part of the campaign, more than 1520 financial advisers across Australia were contacted by ASIC. Of this number, 970 do not have to join FICS as they do not deal with retail clients, and 116 show no signs of joining.
"There are 419 advisers who have indicated that they will immediately sign up with FICS and thereby satisfy this key consumer protection requirement," says Kell.
Despite the large number of financial advisers willing to join FICS on an immediate basis, Kell says the 116 advisers are still a problem.
"We have been in several rounds of communication, however we are still waiting for the 116 advisers to either join the scheme or provide sufficient information to state they do not supply retail advice. Otherwise its time to take disciplinary action," he says.
Kell says the 116 financial advisers in question have until the end of the month until ASIC takes further action.
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