Lifespan claims ASIC push is against FSRA
Lifespan Financial Planninghas criticised theAustralian Securities and Investments Commission (ASIC), claiming that its hard line on some compliance procedures may disadvantage consumers and move against the intended benefits of the Financial Services Reform Act.
The comments come in response to a new licence condition imposed last week by ASIC on Lifespan aimed at improving its compliance procedures.
Though fully cooperating with ASIC in regard to the new condition, Lifespan argues the regulator is not balancing the interests of all participants in financial markets.
Lifespan complains that when giving limited advice, including on small investments, ASIC’s requirement for written plans in all cases is not commercially justified.
Ultimately, Lifespan says enforcement of the requirement by ASIC could lead to small investors being unable to afford financial advice due to increased costs incurred by dealers.
Lifespan also says ASIC has as yet been unable to produce policy statements or written guidelines in the area of limited advice.
The groups also says “ASIC’s vague reliance on so called ‘industry standards’, in these areas, is inadequate, and less enlightening than we have a right to expect from the industry regulator.”
The dealer group believes the financial burden of limited advice plans will be felt particularly by planning groups not owned by large institutions who cannot afford to service small investors at an ongoing loss.
Though it is taking its compliance infringements seriously, Lifespan says they are “clearly not earth shattering” breaches.
The dealer says there were a number of cases when small investments were not confirmed in writing and brokerage was only disclosed verbally, against its own prescribed rules, as well as some minor disclosure mistakes.
The new Lifespan licence condition will require the appointment of an independent compliance consultant to recommend improvements and to report to ASIC.
Lifespan says it chose not to contest the licence change for commercial reasons and because an external compliance consultant would add value to its processes.
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