FSCP reprimands adviser over SOA compliance

The Australian Securities and Investments Commission’s (ASIC) Financial Services and Credit Panel (FSCP) has delivered its latest decision, providing a “written reprimand” to an adviser anonymised as “Ms G”.

The sitting panel determined that it “reasonably believed that the relevant provider contravened s946A(1) and s921E(3) of the Corporations Act 2001 when they failed to give statements of advice to five retail clients between June 2022 and August 2022”.

“In giving the advice, the relevant provider failed to demonstrate the Code of Ethics’ values of competence and diligence and breached Standard 1 of the Code of Ethics,” ASIC said.

This written reprimand is the lowest level of action available to the FSCP.

The reprimand will not be published on the Financial Advisers Register (FAR), however, it is provided to the adviser’s Australian Financial Services (AFS) licensee.

In August 2023, the FSCP issued its first written reprimand to “Mr K”, who had recommended in a statement of advice (SOA) that the clients switch their superannuation from one fund to another and transfer their life and TPD insurance (through super) to another provider.

“Upon discovering that the full amount of cover could not be transferred without further underwriting, the relevant provider did not revisit the advice but instead recommended in a record of advice (ROA) that the clients apportion their cover between the new and existing provider up to the maximum amount allowed without underwriting,” ASIC said.

“Although the clients held life and TPD insurance in their existing superannuation fund, the relevant provider failed to consider their existing insurance or conduct an insurance needs analysis.

“The advice was also inappropriately scoped being limited to superannuation products only when the clients were also seeking retirement planning advice.”