Risk Product, Company and Regulatory Updates as at 22 January 2019

Company Updates

01 PFL Product Company Regulatory.jpg

Adviser licensee joins forces with investment platform for innovation
Cashwerkz, a new investment platform, will be available to Elders Financial Planning advisers for term deposit administration and cash management platform services.

Regulatory Updates

FASEA updates on education standards
The latest update includes that advisers with non-relevant degrees will have access to a somewhat shortened process to meeting the proposed education requirements for financial advisers. If the degree involved between four and seven courses in one or more of the relevant fields of study - financial planning, investment, accounting, tax, finance, business or commercial law - then cross-credits can be applied.

There are eight courses required to meet graduate diploma status, with 120 hours of study each. Advisers can receive credit for two courses. Originally it was proposed that advisers must have the full eight related units to get any credit. The new proposal is more flexible, also removing the proposed 10-year time limit on previous study.

Westpac and BT still failed consumers, says court
ASIC is to examine a Federal Court decision from late 2018 regarding Westpac subsidiaries, finding that Westpac Securities Administration Limited and BT Funds Management Limited failed to do all things necessary to ensure the fair, honest, and efficient provision of financial services. Both companies were found to have breached the Corporations Act after an investigation was commenced by ASIC into the sales campaigns of superannuation funds that did not offer customers a comparison, which is required by law.

The companies were found to have provided personal financial product advice, in breach of their licences. The case has been closely watched, with a landmark Federal Court judgement offering some clarity on general and personal financial advice, which was ruled in Westpac’s favour, despite the breaches still being valid. The breach applies to 15 customers.

Advanced Wealth Financial Services in court
ASIC has commenced court proceedings in Queensland against a former financial adviser and financial planning firm after the advisers, Richard Gardner, and the company, were providing financial services without a licence or authorisation. Gardner made recommendations to clients regarding the establishment of self-managed superannuation funds to buy freshly-constructed investment properties, while also recommending these properties and their builders. Gardner was receiving substantial commissions from the builder or developer used for the constructions.

HNW Planning has licence restrictions applied
The Australian Financial Services licence of HNW Planning Pty Ltd has been curtailed after ASIC determined the financial advice company was not adequately monitoring or supervising its advisers, and that audit processes were deficient. HNW Planning must now engage an independent expert to suggest improvements for self monitoring and supervision processes.