ASIC imposes additional licence conditions on Shartru Wealth Management

The Australian Securities and Investments Commission (ASIC) said the action follows targeted surveillance that found Shartru was not adequately monitoring and supervising its representatives. ASIC also found that some of Shartru’s financial advice failed to meet the best interests duty and related obligations.

The additional licence conditions require Shartru to engage an independent consultant to review and make recommendations on its audit processes.

The corporate regulator added that the independent consultant must also review a sample of advice, audits, and pre-vets and report on the effectiveness of the improvements made by Shartru.

“AFS licensees are responsible for ensuring their representatives comply with financial services laws,” ASIC said.

“ASIC expects licensees to have adequate audit processes to monitor and supervise their representatives. AFS licensees should conduct sufficient periodic audits of their advisers and use suitably qualified staff to conduct these audits.”

Shartru has held its AFS licence since 30 July 2012. The licence conditions were imposed by consent following Shartru’s engagement in addressing ASIC’s concerns.

The corporate regulator has also cancelled the AFS licence of Stephen Wan Tat Chan.

The licence was cancelled because the licensee failed to prepare and lodge the required financial statements and auditor opinions with ASIC.

ASIC added that the licensee failed to pay ASIC’s industry levies and maintain an external dispute resolution membership with the Australian Financial Complaints Authority (AFCA). The cancellation took effect on 28 June 2023.

“Under the Corporations Act, ASIC may suspend or cancel an AFS licence if a licensee fails to meet its general obligations under s912A,” ASIC said.

“This includes the obligation to hold membership of a dispute resolution system and lodge financial statements annually with ASIC.”

The licensee can apply to the Administrative Appeals Tribunal (AAT) for a review of ASIC’s decision.