Following a run-in with the regulator and a departure of its co-founder and managing director Darren Pawski, troubled dealer group WealthSure has rolled out a new strategy to build a robust compliance culture.
The Australian Securities and Investments Commission (ASIC) yesterday announced it had accepted an enforceable undertaking (EU) from WealthSure and Darren Pawski after finding recurring compliance failures despite a previous intervention in 2006.
The EU will see the company implement a Remediation Plan with an independent expert to provide progress reports on a six-monthly, then annual basis.
The regulator also found Pawski was instrumental in the group’s failures, which resulted in his departure from the dealer group. Furthermore, Pawski will not be able to provide financial services or manage any licensee.
He will, however, remain a shareholder in WealthSure, according to the group’s new CEO, David Newman.
Newman, who was initially brought in as a consultant to help the group address ASIC’s concerns, told Money Management WealthSure had made a number of changes in the last six to eight months to improve the compliance culture within the group.
The group had appointed new compliance staff and replaced a manager in the adviser services area. It would also roll out a so-called Adviser Academy – a practice management program to help practices build referral networks and marketing strategy.
WealthSure has also appointed a new audit and risk management committee.
“The issue here is not necessarily about the advice that’s been given, this is about WealthSure and its ability to have proper or more robust compliance processes and monitoring and supervision systems.”
WealthSure had cut ties with around 100 advisers over the past year, most of whom were not a good cultural fit, Newman added.
“We had 350-odd advisers and a number of them represented the end tail of that in terms of either being a small producer or there wasn’t a proper alignment in terms of where we saw the business going,” Newman said.
He added most of ASIC’s concerns – and client claims the group is currently dealing with – were historical in nature and dated back to 2006.
