Platform providers should feel moral obligation to report fraud: lawyer
Platform providers who spot potential fraud by financial planners have a moral and ethical duty to report them to their Australian Financial Services licensee, a lawyer believes.
Speaking at the Money Management 2014 Platforms and Wraps Conference, Alexis Compliance and Risk Solutions principal Christina Kalantzis said there was no legal obligation on platforms to report any suspicious withdrawals of funds by an adviser.
However Kalantzis said platforms were ideally placed to identify potentially fraudulent transactions by advisers.
She told delegates that rouge advisers were using platforms "to get clients' money", adding that she was working on cases of fraud, which she believed could have been prevented had platform providers flagged concerns over the actions of the advisers in question.
"At a law level, it's all in the hands of the AFSL. However, I've got 15 cases right now where it's all about misappropriation of funds coming from platforms... (so) morally and ethically I think there's a role for platforms in the monitoring and supervision stakes."
AUTHOR
Nicholas O'Donoghue
Recommended for you
The month of April enjoyed four back-to-back weeks of growth in financial adviser numbers, with this past week seeing a net rise of five.
ASIC has permanently banned a former Perth adviser after he made “materially misleading” statements to induce investors.
The Financial Services and Credit Panel has made a written order to a relevant provider after it gave advice regarding non-concessional contributions.
With the election taking place on Saturday (3 May), Adviser Ratings examines how the two major parties could shape the advice industry in the future.
