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Compliance audits: Reach out before it’s too late


By Geoff Byrnes

We’re currently seeing advisers departing the industry in droves.  While this may sound dramatic, before 1 January 2019, we had over 29,000 financial planners within the industry. Currently this stands at approximately 25,000.

There are a few main reasons for this mass exit:

  • The new education standards are creating stress for advisers who do not wish to upskill
  • Financial advisers close to retirement are choosing to leave the industry before the new educational requirements come into force
  • Consolidation of many businesses is reducing Authorised Representative numbers
  • Increased compliance has lured advisers into alternative careers
  • ASIC has banned them due to non-compliance

Financial advisers play an integral part in peoples lives and financial planning can be a rewarding career.  The skill level and strategy can be immensely satisfying.  As is the development of a client from the initial consultation, through to seeing the advice having a measurable impact in their life.   As advisers ourselves, we know first-hand the impact we can make in client’s futures.

But putting people’s lives in your hands is also a huge responsibility.  Unfortunately, there is the other side of the financial planning industry where a few tarnish the reputation for the rest of us.  Every day you hear of people losing money; with ASIC eventually catching up with the adviser and banning them from the industry.

We understand the pressures of running a financial planning business and keeping your clients abreast of their financial strategy, structure and investments.  However not having the right paperwork and tools, conducting enough research, or making the right strategy considerations, will come back to bite.  If there is anything that you are unsure about, now is the time to ask before it’s too late.

The main issues we are encountering with this current audit is around the Financial Disclosure Statements (FDS) and Opt-Ins.  While we acknowledge it can be confusing for advisers to see if this has not been completed correctly, it is paramount you understand what clients fit under this legislation – being all clients who are on an ongoing service arrangement from 1 July 2013.

So please, if you’re in any doubt about whether you’re meeting this requirement for your clients, or anything else for that matter, please contact Geoff before it’s too late.  If you make an error and do not advise us or at least question it, then it will have adverse effects that are not easy to reverse down the track.  We’re here to help you and make navigating all of this compliance easier, so please reach out for a chat.

 

 


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