Wealthsure issued with new EUs after restructure
The Australian Securities and Investments Commission (ASIC) has accepted new enforceable undertakings (EU) from the two arms of the Wealthsure group following the restructure and sale of its planning business to the Sentry Group.
The Wealthsure businesses - Wealthsure Pty Ltd (WPL) and Wealthsure Financial Services Pty Ltd (WFS), both based in Perth, received a joint EU in September 2013 after an ASIC investigation found recurring compliance failures and removed then chief executive Darren Pawksi from any role within the Wealthsure businesses.
As part of the original EU, WPL and WFS were required to address the failure to develop and maintain its compliance obligations and to restructure the group's board to oversee the changes.
ASIC stated it has accepted new, separate EUs from WPL and WFS following a restructure in which Sentry Group Advice Pty Ltd, which is owned by Sentry Group, acquired WFS and took on most of the authorised representatives of WPL.
The regulator stated the new WFS EU was developed between ASIC, Wealthsure and Sentry to ensure the remediation plan formed under the Wealthsure Group EU was still fulfilled under the new corporate structure
Under the new EU WFS will still be need to continue implementing its remediation plan, have it overseen by an independent expert and report regularly to ASIC until October 2018. WFS has also agreed to move only a maximum of seven authorised representatives to Sentry each year without the consent of ASIC
As a result of the transfer of WPL authorised representatives to WFS, WPL will cease to provide financial services and will request to have its Australian Financial Services Licence cancelled but would still need to comply with the terms of the new EU that address unresolved and unrealised complaints.
As such WPL will be required, until October 2018, to engage an independent compliance consultant to manage its internal dispute resolution system, maintain membership of an external dispute resolution scheme, maintain professional indemnity insurance, maintain capital and notify all clients with an unresolved complaint about the changes.
"The Wealthsure Group has made significant progress towards addressing ASICs concerns, introducing new personnel, procedures and systems. While ASIC is satisfied with the Wealthsure Group's remediation progress, we have taken the view that the earlier undertakings would best be fulfilled by WPL and WFS having separate EUs" ASIC stated.
AUTHOR
Jason Spits
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