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Thursday 5 September 2013

13-248MR ASIC concerns prompt Anne Street Partners to change their financial advice practices

Australian financial services licence holder Anne Street Partners Financial Services Pty Ltd (ASP) has agreed to address ASIC concerns relating to the provision of its financial product advice to clients.

ASIC’s surveillance of ASP identified concerns surrounding the appropriateness of advice provided to clients regarding the establishment of a self-managed superannuation fund (SMSF). In particular, there were concerns relating to:

  • the low balance with which SMSFs were established

  • the advice not being sufficiently tailored to the needs of each client

  • inadequate comparison of clients' existing superannuation to the recommended SMSF

  • inadequate consideration of suitable alternative strategies that would have met clients' needs, and

  • inadequate consideration of clients' long-term retirement planning objectives.

Further, ASIC had concerns relating to:

  • the management of conflicts of interest where the advice provided to clients resulted in referrals to related ASP entities, and

  • inadequate monitoring and supervision of representatives, in particular ensuring representatives are adequately trained and competent to provide SMSF advice.

ASIC Senior Executive Leader Louise Macaulay said, ‘The decision to establish an SMSF is a significant step for an investor because it involves greater personal responsibility. Those providing financial advice must ensure that they take into consideration consumers' individual circumstances and make sure the advice adequately meets their needs’.

ASP has agreed to engage an independent expert who will review, assess and make recommendations regarding:

  • the SMSF advice provided by ASP to clients

  • the adequacy of ASP's conflicts management arrangements, and

  • ASP's measures for monitoring and supervision of representatives.

The independent expert will report to ASIC and ASP over the next 18 months to ensure ASIC's concerns are addressed.

ASP has already implemented a number of measures to improve its advice process and to ensure clients receive good quality financial advice. These include:

  • improvements to its risk profiling tool and advice template documentation

  • implementation of a new client relationship management system, and

  • ensuring all representatives receive specialised SMSF training and are competent to provide SMSF advice.

‘With the continuing growth of SMSFs, ASIC will closely monitor the industry to ensure businesses have the processes in place to provide consistently good financial advice’, Ms Macaulay said.

ASP has cooperated fully with ASIC's inquiries and ASIC acknowledges the constructive action taken by ASP to address its concerns.

Last updated: 05/09/2013 12:00