ASIC slaps infringement notices on 3 AFSLs
ASIC issued infringement notices to three AFSLs in February whose financial advisers provided personal advice to a retail client while unregistered.
Australian Advice Network Pty Ltd, IA Advice Pty Ltd and Sherrin Partners Services Pty Ltd each paid an infringement notice penalty of $31,300 on 5 March 2025, 21 March 2025 and 24 March 2025, respectively. However, payment of an infringement notice is not an admission of guilt or liability, ASIC stated.
“ASIC acted because it had reasonable grounds to believe that the AFS licensees had authorised a financial adviser who gave personal advice to a retail client in relation to relevant financial products while the adviser was unregistered,” it stated.
Each licensee immediately registered their adviser and breach reported to ASIC after becoming aware of their individual being unregistered, with ASIC saying it had regard to these circumstances in deciding its approach to taking enforcement action.
The regulator stated failure to register an adviser creates a risk for consumers who may receive personal advice from unregistered advisers. Moreover, the registration requirement is an “important consumer protection mechanism” to ensure AFSLs have received declarations about whether their advisers are fit and proper, while meeting the education standards.
ASIC continued: “Failure to register financial advisers may also indicate that AFS licensees do not have adequate governance arrangements in place to ensure they comply with the law.”
Last year, ASIC commissioner Alan Kirkland cautioned that a failure to comply with the registration requirement could lead to significant consequences for unregistered advisers who offer personal advice.
“The provision of personal advice by unregistered advisers is prohibited and carries significant penalties,” he said in January 2024.
The regulator reminded advisers and licensees to check their registration on the Financial Advisers Register (FAR) before providing any personal advice to retail clients.
The requirement for relevant providers to be registered was introduced by the Financial Sector Reform (Hayne Royal Commission Response—Better Advice) Act 2021 (Better Advice Act) in response to Recommendation 2.10 of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
The registration requirement is separate to the pre-existing requirement for an AFS licensee to appoint a relevant provider to the FAR once they have been authorised.
AUTHOR
Jasmine Siljic
Recommended for you
Compared to four years ago when the divide between boutique and large licensees were largely equal, adviser movements have seen this trend shift in light of new licensees commencing.
As ongoing market uncertainty sees advisers look beyond traditional equity exposure, Fidante has found adviser interest in small caps and emerging markets for portfolio returns has almost doubled since April.
CoreData has shared the top areas of demand for cryptocurrency advice but finds investors are seeking advisers who actively invest in the asset themselves.
With regulators ‘raising the bar’ on retirement planning, Lonsec Research and Ratings has urged advisers to place greater focus on sequencing and longevity risk as they navigate clients through the shifting landscape.
