Planning practices fear breach reporting
Fear is stopping financial planning organisations from notifying the corporate regulator of breaches in their business rather than poor culture, according to legal advisory firm The Fold.
The company's managing director Claire Wivell Plater said a lot of businesses have a rule that they cannot report breaches to the Australian Securities and Investments Commission (ASIC) until it has been considered by either the directors or the external lawyer.
"The regulator has identified that some businesses think that if they report breaches ASIC is going to come through and shut them down. It's like dobbing themselves in," Wivell Plater said.
"It's almost like that sort of fear is indicative of poor compliance culture."
"It defeats the purpose if you don't report within that time period because failing to report a breach in that period is actually another breach."
She said her firm takes a middle-man position, where they get their clients to report breaches as fast as possible to give ASIC a preliminary indication of what action the company will take to address it.
"We find that if ASIC is already comfortable that you're working on the breach and you know what you're going to do to address it they tend to give you then the opportunity to do that," she said.
ASIC's deputy chairman Peter Kell recently warned financial planning organisations against poor culture and pushed for remuneration incentives to be based on good culture instead of sales.
It came as ASIC launched a crackdown on breach reporting and high-risk licensees, who may then face action.
AUTHOR
Malavika Santhebennur
Recommended for you
Technology firm Iress and investment manager Challenger have formed a strategic partnership to launch an adviser solution to better serve their retiring clients.
There have only been a “handful” of opportunities in the last 20 years when infrastructure has looked as cheap relative to equities as it does now, according to Lazard, making it a viable option to provide portfolio security amid market volatility.
The Australian Financial Complaints Authority has reported an 18 per cent increase in investment and advice complaints received in the financial year 2025, rebounding from the previous year’s 26 per cent dip.
EY has broken down which uses of artificial intelligence are presenting the most benefits for wealth managers as well as whether it will impact employee headcounts.
