NSW adviser suspected of neglecting obligations

ASIC has raised concerns over the compliance of a NSW-based advice business. The regulator has imposed additional conditions on the Australian Financial Services (AFS) licence of Lionsgate Financial Group (Lionsgate), following surveillance of its advice business.

Concerns have been raised over Lionsgate’s compliance; in particular that Lionsgate has not:

• Maintained sufficient resources to carry out supervisory arrangements
• Properly assessed and monitored its representatives’ competence to provide financial services
• Taken reasonable steps to ensure the its representatives complied with financial services laws in providing financial services to clients
• Had adequate measures in place to meet its record-keeping obligations
• Implemented supervisory arrangements, including an audit program, that are effective

An independent expert has been appointed to review the firm’s compliance with its general licensee obligations and to conduct Lionsgate’s audit program. The expert will report to Lionsgate and ASIC and provide recommendations that Lionsgate will be required to implement.

The independent expert will also review some instances of advice provided to clients and determine whether the advice complied with obligations under the Corporations Act. ASIC will continue to monitor Lionsgate’s compliance, via reports from the expert, for 2 years.