Grosvenor falls foul of ASIC
The Australian Securities and Investments Commission (ASIC) has commenced an enforceable undertaking action on Grosvenor Securities’ 40 advisers, following a surveillance visit and follow up inquiries.
The Australian Securities and Investments Commission (ASIC) has commenced an enforceable undertaking action on Grosvenor Securities’ 40 advisers, following a surveillance visit and follow up inquiries.
ASIC has reviewed the practises of a number of the Melbourne based company’s advisers and identified deficiencies in training and supervision of its representa-tives. This included instances where representatives had recommended products and asset allocations which ASIC believed were not appropriate to those clients’ needs.
An enforceable undertaking is used by ASIC as the step before taking court action. It gives a company the opportunity to comply with ASIC’s complaints in a set time period.
ASIC also reviewed the method of which Grosvenor’s representatives obtained payments directly from clients for fees owed to Grosvenor as principal. The indus-try regulator has formed the view that the company’s method of payment breached the Corporations Law — which requires licence holders to account for all income received from commissions.
According to Grosvenor’s report, released by ASIC, the company has agreed to appoint an independent consultant to conduct a compliance review of its proce-dures and processes over a period of 12 months; appoint a full time compliance of-ficer to make annual visits to its representatives.
Grosvenor is not the first Australian company to have fallen foul of ASIC and had an enforceable undertaking placed on them. Connelly Temple, National Mutual Health Insurance, Westpac and Suncorp-Metway have all been investigated in the past year.
Victorian Regional Commissioner Sue Carter says the surveillance of licence hold-ers was part of ASIC’s continuing efforts to help protect the investing public by improving the standards of participants in the financial services industry.
“By agreeing to measures set out in the enforceable undertaking Grosvenor is demonstrating a commitment to implement procedures which ensure compliance with legal requirements and best industry practises,” he says.
Recommended for you
Licensing regulation should prioritise consumer outcomes over institutional convenience, according to Assured Support, and the compliance firm has suggested an alternative framework to the “licensed and self-licensed” model.
The chair of the Platinum Capital listed investment company admits the vehicle “is at a crossroads” in its 31-year history, with both L1 Capital and Wilson Asset Management bidding to take over its investment management.
AMP has settled on two court proceedings: one class action which affected superannuation members and a second regarding insurer policies.
With a large group of advisers expecting to exit before the 2026 education deadline, an industry expert shares how these practices can best prepare themselves for sale to compete in a “buyer’s market”.
