Advice firm to report to ASIC

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Moneywise Securities has agreed to meet additional licence conditions imposed by ASIC, following surveillance of the company.

ASIC has acknowledged the cooperation of the company, but said that surveillance found concerns relating to:

  • Advice that did not adequately consider the specific needs of the client but recommended the client establish a margin loan or self managed super fund
  • Compliance with the disclosure requirements when the advice provided to clients included the replacement of one financial product with another. The concerns related to inadequate cost and feature comparisons between the clients’ existing superannuation and the recommended fund
  • The management of conflicts of interest where the advice provided to clients resulted in transactions with a related entity of Moneywise.

An independent expert will be appointed for the next 18 months to review, assess and make recommendations regarding:

  • The advice provided by Moneywise to clients in relation to margin lending and self-managed super
  • The adequacy of Moneywise’s conflicts management arrangements
  • Moneywise’s measures for monitoring and supervision of representatives, and
  • The adequacy of Moneywise’s internal dispute resolution system.

ASIC senior executive leader Louise Macaulay said, “When providing advice on more complex financial products such as margin loans or SMSFs, the advice provider must be particularly diligent in ensuring the financial product is suitable to the specific needs of the client.”

The announcement comes after ASIC said it would be cracking down on DIY super advice to clients yesterday.