Queensland planning firm hit over conflicts
A Queensland-based financial planning company has had additional conditions imposed on its Australian Financial Services Licence (AFSL) following surveillance of the business by the Australian Securities and Investments Commission (ASIC).
ASIC announced it had imposed the additional license conditions on the basis of concerns that iPlan had entered into an agreement regarding an investment platform which gave rise to a conflict of interest.
It specified its concerns as being that iPlan may have advised clients to transfer from an existing financial product to the platform without disclosing a reasonable basis for the advice, the disclosures in relation to iPlan’s conflict of interest, relevant to the advice provided, were insufficient and a number of clients sustained financial detriment as a result of the advice.
The regulator said it had varied iPlan’s AFSL to include conditions that required the business to undertake further communication with its clients about how it manages conflicts of interest.
It said the company also had to appoint an independent compliance expert to review its advice process and calculate payments to be made to clients entitled to financial redress.
Commenting on the moves, ASIC senior executive leader, financial literacy, consumers, advisers and retail investors, Delia Rickard said licensees often had a conflict of interest when recommending products to clients.
“We say it is up to them to manage these conflicts and, if a conflict exists, they need to make sure they demonstrate a reasonable basis for any product recommendations,” she said.
The ASIC announcement acknowledged what it described as an efficient, co-operative and consultative approach taken by iPlan, which had voluntarily offered to engage an independent expert to review its processes for compliance.
It said ASIC would continue to monitor iPlan’s compliance, via reports from the independent compliance consultant, for 26 months.
AUTHOR
Mike Taylor
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