Investment
ASIC approves AMP for MDAs

ASIC granted AMP Financial Planning approval to deal in managed discretionary accounts.

ASIC said it imposed additional license conditions on AMP Financial Planning as a result of approving AMPFP's application to vary its license to provide MDAs.

Since September 2016, licensees have been transitioning away from ASIC's previous no-action position on MDA services, to modified licenses allowing them to deal in MDAs on regulated platforms.

That transitionary period expired in 2018 and as such, AMP's advice business was required to seek a variation of its AFS license to comply with ASIC's updated position.

The corporate regulator approved AMPFP's request, but also imposed additional license conditions on the firm "to ensure that AMPFP had adequate arrangements in place to comply with obligations related to the provision of MDA services."

ASIC said it tailored the new conditions to AMP Financial Planning after surveillance efforts, noting MDAs create particular risks for retail clients because MDA providers are authorised to make investment decisions on the behalf of their clients without their prior approval.

"The conditions were put in place to ensure that AMPFP adequately monitors and supervises the MDA services provided by its advisers, and that its advisers are adequately trained and meet their best interests obligations," ASIC said.

The corporate regulator also said it added the conditions to ensure AMPFP maintained adequate records and had the necessary human, financial and technological resources, risk management and internal dispute resolution systems to offer MDAs.

When questioned by Financial Standard, AMP Financial Planning did not specify its additional license conditions, however confirmed it agreed to implement additional controls and safeguards for its MDA clients.

"AMP Financial Planning is pleased it has obtained approval from ASIC to continue to support clients receiving Managed Discretionary Account (MDA) services," an AMP spokesperson said.

AMPFP confirmed that since ASIC required licensees across the industry to renew their authority to provide MDA services it had worked constructively with the corporate regulator.

ASIC commissioner Danielle Press said ASIC is expecting improvements across the advice industry, and additional license conditions were part of ongoing efforts to make those expectations clear to licensees.

"ASIC will impose license conditions based on what an applicant is seeking authorisation for, what we know of them, and what we may see during the application assessment process," Press said.

"New license applicants and licensees seeking variations can expect to see ASIC tailor licence conditions more often."

Read more: ASICMDAAMP Financial PlanningAMPFPManaged Discretionary AccountAFSDanielle PressFinancial Standard
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