Three AFS licensees pinged over compliance breaches

Three AFS licensees - Australian Advice Network, IA Advice, and Sherrin Partners Services - have copped infringement notices from ASIC after their financial advisers provided personal advice while unregistered. Each licensee paid a $31,300 penalty in March.

The corporate regulator said it had "reasonable grounds" to believe the AFS licensees authorised a financial adviser, who gave personal advice to a retail client in relation to "relevant financial products" without being registered.

ASIC said registration requirements are an "important consumer protection" because it confirms AFS licensees have assessed whether their advisers are "fit and proper," and that they meet the applicable education and training standards.

"Failure to register a financial adviser creates a risk for consumers," the regulator said.

The regulator added that a failure to register financial advisers may also indicate that licensees lack adequate governance arrangements to ensure compliance with the law.

ASIC noted each penalised licensee promptly registered their adviser and reported the breach after becoming aware the individual was unregistered.

The regulator said it took these circumstances into account when determining its enforcement approach, which may explain why the $31,300 penalty is half the $62,200 maximum a court can impose for each contravention.

The registration requirement has applied since February 16. It requires a relevant provider to be both authorised by an AFS licensee and registered with ASIC before providing personal advice to retail clients. A relevant provider includes a financial services licensee, an authorised representative, or an individual employed by or acting as a director of a financials services licensee who's authorised to provide such advice.

ASIC said it's been actively monitoring compliance with the registration requirement for financial advisers and working to raise awareness with licensees and relevant providers.

In January, ASIC commissioner Alan Kirkland warned that a failure to comply with the registration requirement could incur significant consequences for unregistered financial advisers who continue to provide personal advice and their authorising AFS licensee.

"The provision of personal advice by unregistered advisers... carries significant penalties," Kirkland said.