A Melbourne based financial advice provider is to appear in the Federal Court of Australia for alleged contraventions of the Future of Financial Advice obligations.
Following an ASIC investigation, Wealth and Risk Management (WRM), and its related companies Yes FP and Jeca (trading as Yes FS), have been accused by the regulator of various breaches of the Corporations Act and the Australian Securities and Investments Commission Act. This includes alleged breaches of the best interests obligations, engaging in unconscionable conduct, and failing to hold a current AFSL license.
ASIC alleges that on numerous occasions since December 2015, WRM advisers have provided advice that is conflicted and in breach of the best interests obligations contained in the Corporations Act.
WRM is licensed to advise retail clients about, and deal in, life risk insurance and superannuation products. WRM authorises advisers, generally employed by WRM's corporate authorised representative Yes FP, who provide personal financial advice to retail clients referred to them by Yes FS, via the website yesfs.com.au.
ASIC is seeking injunctive relief, declarations of contraventions and financial penalties.
Separately, an ASIC led investigation has led to the arrest of Queensland based financial adviser Dr Roger Gareth Munro following five counts of fraud under s408c of the Queensland Criminal Code.
In 2015, ASIC filed a successful application in the Supreme Court of Queensland alleging that Munro breached s911A of the Corporations Act by carrying on a financial services business without as AFSL license.
The matter is being prosecuted by the Commonwealth Director of Public Prosecutions.
On Friday, ASIC released a report on how large financial advice firms have addressed serious conduct, compliance and customer remediation issues, revealing serious concerns about how the industry has operated over the past five years.
The review-which forms part of ASIC's broader Wealth Management Project-was focused on the conduct of the financial advice arms of AMP, ANZ, CBA, NAB and Westpac.
In the report, ASIC identified a number of areas of concern where further improvements need to be made, including: failure to notify ASIC about serious non-compliance concerns regarding adviser conduct, inadequate background and reference-checking processes, and inadequate audit processes to assess whether the advice complied with the 'best interest' duty and other obligations.
As of 31 December 2016, ASIC had banned 26 advisers identified who demonstrated serious compliance concerns, and has ongoing investigations or surveillance activities in relation to many others.