What is an Investigation?

As the new breach reporting obligations are about to commence from 1 October 2021, ASIC has provided an explanation of what constitutes an investigation into a possible breach and what should trigger the start of a 30-day window before investigations become a “reportable situation”.

Questions have been raised as to when an investigation into a possible breach starts amid concern that too many scenarios would trigger an investigation.

ASIC has outlined several situations in RG 78 that aren’t considered starting points.

ASIC has stated that the “mere receipt of a detective control” such as a disclosure from a whistleblower, a complaint, or a regulatory request is not an investigation that needs to be reported.

Further to this, “preliminary steps and initial fact-finding inquiries into the nature of the incident”, are not considered starting points, as long as they are completed over a short time frame and as an initial response.

ASIC also advised that, “business as usual inquiries such as routine audits, quality assurance monitoring, or other internal compliance review processes, are only reportable to us if they are triggered by an incident or assess, or will be, assessing a possible breach of a core obligation”.

These explanations also include four example scenarios − including fee for no service issues and complaints, and case studies designed to illustrate when an investigation is triggered and subsequently becomes reportable.

An investigation will now become reportable on day 31 of the investigation, after which licensees will have another 30 days to lodge a report to ASIC.

Where are your priorities?

Originally published | 16th September 2016

Set out in s961J of the Corporations Act, is a rule that many advisers might gloss over. It is the conflicts priority rule.

This rule is similar in nature to the previous obligation to provide “appropriate advice”. The priority rule expressly requires an advice provider (Financial Adviser) to prioritise the interests of the client if the financial adviser knows, or reasonably ought to know; when they give the advice that there is a conflict between the interests of the client and the interests of:

  • The financial adviser; or
  • The financial adviser’s Australian Financial Services (AFS) licensee.

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Your Objectives, should you choose to accept them!

Originally published | 23rd September 2016

What do most compliance managers, or quality assurance managers, question when discussing the quality of advice?

Does the recommended strategy meet the client’s goals?

The invariable discussion is that in the fact-finding stage of advice, you the adviser, must document the client’s goals. These goals must be specific, measurable, achievable, realistic and timely.

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Evolution of Legislation

Originally published | 2nd October 2017

A lot of advisers I speak with still long for the good old days where advice seemed easier and the compliance burden was less.

Unfortunately, because of the sins of a few, our legislation has had to evolve to protect not only the client, but ourselves.

That’s the nature of a mature society as well, where they can evolve their legislation, and their constitution, to meet the demands of the current day.

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With great power comes great responsibility

Originally published | 10th October 2017

Does the title sound familiar?

In 1962, the Amazing Spider-Man was introduced to the world and after gaining his powers he tried wrestling for money. His selfishness in using his power for himself saw him neglect to stop a burglar who later killed his uncle. 

So what has this got to do with Financial Planning?

I see the authorisation of being a financial planner/adviser as providing a great power in being able to help clients achieve their goals. But with that power comes responsibility and I feel lately that our industry isn’t learning from our mistakes. 

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Does history repeat itself?

Originally published | 18th October 2017

“Those who cannot remember the past are condemned to repeat it”.  

These words were penned in 1905 by Spanish-American Philosopher, George Santayana.  

But as a society, especially in the financial services industry, have we ever really given this aphorism it’s due?

Do you remember doing history at school?

I loved it, and still do.  To me, learning about history provided me with the way understanding how our current society was formed.  

Do we use the same philosophy in financial planning? I will put my hand up and say I do.

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Best Interest Jigsaw Puzzle

Originally published | 25th January 2018

We’ve recently seen a lot of action from the Regulator in regards to financial planners not meeting their best interest duty.  This action has seen enforceable undertakings, additional licence conditions and in some cases, banning orders.

It led an adviser I know to recently say to me that “The Best Interest Duty can never be 100% fulfilled because for every goal or problem there are many solutions possible and no one right approach. And hindsight will always be a factor. And ASIC seems to focus only on fees and so we are doomed if we offer any solution where the fees are higher no matter how good the advice or product is”.  

This seems to be a current reaction to any media in regards to this subject. 

What was my answer to this adviser?

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