ASIC imposes conditions on Guardian Advice

According to a statement from ASIC, surveillance by the corporate regulator found the dealer group was not complying with its general obligations as an AFSL holder, including failing to properly supervise its authorised representatives.

Under the conditions announced by ASIC, Guardian Advice must appoint an ASIC-approved independent consultant to review its compliance with its general licensee obligations and develop a plan to rectify any deficiencies identified by the expert.

The expert will report regularly to ASIC over the next two years on Guardian Advice’s implementation of the plan, and ASIC may publish the results of the reports, according to the statement.

“The weaknesses in Guardian Advice’s systems and controls show that there was an ongoing risk that unsuitable advice could be provided by Guardian Advice and its authorised representatives,” ASIC deputy chairman Peter Kell said.

In the statement, ASIC acknowledged the cooperative and constructive approach that Guardian Advice has taken in response to the concerns raised by ASIC.

ASIC said its surveillance across Guardian Advice’s business found instances where there was not a demonstrated reasonable basis for the advice provided and also files that did not evidence the advice given was in the best interests of clients.

It also said Guardian Advice did not have adequate arrangements in place to ensure it was complying with its general obligations as an AFSL holder.

Specifically, ASIC expressed concern that Guardian Advice did not properly assess and monitor its representatives’ competence to provide financial services, did not have adequate measures in place to meet its record-keeping obligations, did not adequately respond to identified breaches by its representatives, and did not have adequate human and technological resources in place.

According to the statement, ASIC has ongoing inquiries and will consider enforcement action or other regulatory action such as bannings of individual advisers where inappropriate advice was provided.