ASIC points to dealer group’s ‘appalling record’
National dealer group AAA Financial Intelligence had an "appalling record" that put at risk the quality of advice provided to retail clients, according to the Australian Securities and Investments Commission (ASIC) Commissioner Peter Kell.
ASIC recently cancelled the Australian Financial Services Licence (AFSL) of AAA Shares and AAA Financial Intelligence, after two years of surveillance over the business.
According to the industry regulator, AAA failed to ensure its planners had the necessary knowledge and skills prior to appointing them as authorised representatives, and failed to provide them with adequate training.
Futhermore, the dealer group adopted a business model that only allowed it to increase cash flow by increasing the number of advisers it authorised.
The AAA charged the business did not maintain sufficient financial resources to comply with its general obligations.
ASIC also highlighted that AAA did not manage conflicts of interests, did not have appropriate compliance measures, nor did it have adequate human resources to identify its authorised representatives.
"Licensees have a general obligation to do all things necessary to ensure they provide financial services efficiently, honestly and fairly," Kell said.
"AAA Financial Intelligence was found to have an appalling record that put at risk the quality of advice it provided to retail clients."
ASIC has asked all AAA representatives to communicate the consequences of the licensee cancellation to their clients.
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