Compliance checkASIC GuidesRemediationWhat to do

Compliance check for subscribers

Finchat individual subscribers can submit financial advice they have received for a free compliance check. The check will review the advice for any compliance breaches, taking into account the Corporations Act and ASIC’s regulatory guides;

Corporations Act

An advice provider must:

  • Act in the best interests of its clients in relation to the advice;
  • Provide advice that is appropriate for the clientgive a warning to the client if it is reasonably apparent that the advice is based on incomplete or inaccurate information about the client’s objectives, financial situation or needs; and
  • Prioritise the interests of the client over its own interests and those of some of its related parties.

An AFS licensee and its representatives must:

  • give the client an annual fee disclosure statement outlining information about the fees paid and the services received by the client over the previous year; and
  • only charge an ongoing fee if the client ‘opts in’ to continue the ongoing fee arrangement every two years. This opt-in requirement applies unless ASIC is satisfied that the licensee or its representatives are bound by a code of conduct that, among other things, obviates the need for complying with the opt-in requirement in the Corporations Act.

An adviser has further obligations under s912A(1) of the Corporations Act to:

    1. do all things necessary to ensure that the financial services covered by your licence are provided efficiently, honestly and fairly (s912A(1)(a));
    2. have adequate arrangements in place for managing conflicts of interest (s912A(1)(aa));
    3. comply with the conditions on your licence (s912A(1)(b));
    4. comply with the financial services laws (s912A(1)(c));
    5. take reasonable steps to ensure that your representatives comply with the financial services laws (s912A(1)(ca));
    6. have adequate financial, technological and human resources to provide the financial services covered by your licence and to carry out supervisory arrangements (s912A(1)(d)).
    7. maintain the competence to provide the financial services covered by your licence (s912A(1)(e));
    8. ensure that your representatives are adequately trained and competent to provide those financial services (s912A(1)(f));
    9. if you provide financial services to retail clients, have a dispute resolution system (s912A(1)(g)); and
    10. establish and maintain adequate risk management systems (s912A(1)(h)).

ASIC regulatory guides

ASIC provides Regulatory Guides on how the Corporations Act should be applied and these will also be a valuable source when doing the review.

These guides include guidance on;
  • Fee and other disclosures
  • Conflict of interests
  • Types of advice and their consequences
  • Statement of Advice and contents
  • Organisational competence
  • Product advice
  • Compliance breaches
  • Reviews and remediation

Remediation

Finchat will produce a report detailing any compliance breaches (if any) and the next steps to remediation.

ASIC sets out how remediation is approached in ASIC guide RG 256.

ASIC guide RG 256 looks at Client review and remediation

Overview
  • What is client review and remediation
  • What is a systemic issue
  • Our policy objectives
  • Key considerations for review and remediation
When review and remediation is appropriate
  • When to initiate review and remediation
  • Interaction with IDR and EDR obligations
  • Interaction with AFS licensing obligations
Determining the scope of review and remediation
  • Identifying the scope of review and remediation
  • Inviting clients to participate in review and remediation
  • Revising the scope
Design and implementation
  • Designing a review and remediation process
  • Developing the processes for review and remediation
Communicating with clients
  • Communicating generally with clients about review and remediation
  • When and how to communicate with clients

What to do

Email

Email a copy of the Statement of Advice (SoA) to complyeye@finchat.com.au.

Hard copy

You can make a copy of the Statement of Advice and send it to;

PO Box 1477

Potts Point

NSW, 1355.

Time frame

We will complete the review within five working days.