ASIC has made changes to Class Order [CO 14/923] Record-keeping obligations for Australian financial services licensees when giving personal advice.

ASIC says the changes make the following obligations, which already exist, clearer:

  • AFS licensees must have access to records for the period of time that the records are required to be kept – even when a third party holds those records; and
  • Authorised representatives who are advisers must keep records, and give those records to the AFS licensee upon request.

ASIC states that even though the changes do not create new obligations, it will take a facilitative approach to compliance for six months to allow for system changes to be made. The facilitative period will end on 26 April 2017.


ASIC issued infringement notices to a financial advising group for potentially misleading claims on its website, resulting in two entities each paying a $10,800 penalty. The representations involved the use of the words ‘independent’ and ‘nonaligned’. ASIC was concerned these words would lead consumers to assume services were unaffected by any conflict of interest or commissions. The terms had been removed from the website.

TIP: Click here to check words to avoid in promotional materials.


The Minister for Revenue and Financial Services, the Hon Kelly O’Dwyer MP has announced that the legislation to mandate professional standards for financial advisers will be introduced into Parliament this year.

The new regime including compulsory education requirements, supervision requirements, a code of ethics and professional development requirements will commence on 1 January 2019.

Ms O’Dwyer said “This independent standards body will raise minimum standards in the financial advice industry and improve public confidence in the sector”.


ASIC has released Report 498: An industry review containing its findings into the life insurance industry in Australia.

ASIC’s review focused on claims handling processes and outcomes relating to life, total and permanent disability (TPD), trauma and income protection insurance in order to identify any systemic issues across the industry.

The review gave rise to concerns for ASIC in relation to declined claim rates and claims handling procedures associated with TPD, particular insurers and particular causes for consumer complaints.

Specifically, ASIC expresses concern that in some cases claims are being declined on technical or contractual grounds that are not in accordance with the ‘spirit’ of the policy.

You can access the full report here.


ASIC has released Report 499 Financial advice: Fees for no service which, as part of ASIC’s ongoing wealth management project. The report provides an update on ASIC’s work to address failures to provide advice where customers pay for the service.

The report sets out that failures have arisen due to situations such as:

  • No adviser being allocated to the particular customer; or
  • The adviser failed to provide the ongoing service, and the licensee failed to ensure that they did.

ASIC states that approximately $23.7 million worth of refunds and compensation has been paid to customers of ANZ, NAB, CBA, Westpac and AMP. ASIC expects that this figure may increase to a total of approximately $178 million.

Most of the failures are reported to have occurred prior to the introduction of the FOFA reforms.


Recent changes to Chapter 4 of the AML/CTF rules have resulted in significant changes for reporting entities.


Previously required a reporting entity was required to collect “know your customer” information from that customer. The rules have now been updated so that information can now be collected about a customer. That is, reporting entities can now collect information from a source external to the customer. That same source can be used to verify the information.


Previously, reporting entities who wished to utilise electronic verification methods for medium or lower risk customers were required to verify:

a. The customer’s name and residential address from two separate, reliable and independent data sources and either;

i. The date of birth of the customer from one independent data sources; or

ii. That the customer has had a transaction history for at least 3 years.

Now, the verification required is to check the customers:

i. Name; and

ii. Residential address; or

iii. Date of birth; or

iv. That the customer has had a transaction history for at least 3 years.

Although it is only necessary to verify transaction history from one data source, it is necessary to verify the customer’s name, residential address or date of birth from two separate data sources.


A former Tasmanian financial adviser has been permanently banned from providing financial services. An ASIC investigation revealed that for over 10 years the adviser had acted dishonestly by providing false statements to clients about his qualifications and falsely created certificates evidencing such qualifications which were relied upon the licensee which he was a representative of.

ASIC has permanently banned a former Aussie Home Loan mortgage broker, from engaging in credit activities after finding that he submitted false documents to a lender in support of client loan applications.