Are licensees backdating adviser resignations?

There are concerns that smaller licensees are backdating adviser resignations on the Financial Advisers Register (FAR), as new figures from Wealth Data have revealed.

Commenting on the latest adviser movements, Colin Williams, the founder of Wealth Data, said that while 11 licensees reported their closure in the week to 1 December, as many as 10 had adviser resignation dates backdated to 1 January this year.

“This is obviously not a coincidence,” Mr Williams said.

“In February this year, ASIC responded to a senate economics committee and stated that they will follow up with AFSLs who are not reporting advisers who should be removed from the ASIC FAR, as a result of not passing their FASEA Exam.”

Mr Williams revealed that Wealth Data had seen “a large number” of small licensee closures during May and June, with advisers’ resignations backdated into December 2021.

“This current batch of advisers who are being removed may be related to the same matter,” he noted.

These inconsistencies, which allowed many advisers to remain on the FAR for a period beyond their exit, raised some “glaring concerns” about the current AFSL reporting system, Mr Williams said.

“The very popular Moneysmart website, operated by ASIC, in its first sentence under the heading ‘Getting the right advice’ states, ‘Make sure your financial adviser has an Australian financial services (AFS) licence. Check their qualifications on the Financial Advisers Register’. Obviously, some advisers are showing up as qualified even though they have not passed the most critical of exams monitored and now managed by ASIC,” Mr Williams noted.

“I guess many will be asking if the advisers have given any advice since 1 January 2022 and if so, what are the consequences. And of course, how and why has it taken so long for ASIC to catch up with the licensees.”

He raised the possibility that smaller licensees need extra support and closer monitoring.

“If they are getting the basics wrong, what else is going on in the business?

“It is an odd situation, whereby in many instances across small licensees, the financial adviser is also the licensee owner, compliance manager, and in charge of client complaints. A few conflicts one might say.”

Overall, adviser numbers decreased by 30 to 15,864 in the week to 1 December.