Risk Regulatory Update
/Regulatory Updates
CPD relief for advisers during pandemic
The Financial Adviser Standards and Ethics Authority (FASEA) has granted advisers another three months to meet the 40-hour continuing professional development (CPD) requirements. The extension is a one-off to acknowledge the difficulties advisers are facing during the COVID-19 pandemic. Advisers are required to complete 40 CPD hours in 12 months in future CPD years and cannot double count hours over multiple years.
smartMonday members compensated for non-compliant advice
Over 1,265 smartMonday members have received compensation totalling $2.6 million after two third-party financial advisers failed to comply with legislation requiring superannuation accounts to be transferred to Aon MySuper by 1 April 2017 unless explicitly opted out. The members’ account balances were diminished as a result, with compensation to be paid to equal the financial position they would have been in had the advisers complied.
Aon Hewitt Financial Advice notified the Australian Securities and Investments Commission (ASIC) of the suspected breaches by two financial advisers in its network of 185 advisers. An audit revealed the advisers didn’t have enough evidence of instructions to switch the clients out of MySuper. The cases were part of a Royal Commission case study.
APRA’s Westpac investigation update
The Australian Prudential Regulation Authority (APRA) has given some powers to ASIC regarding investigation matters arising from AUSTRAC’s proceedings against Westpac Banking Corporation to avoid doubling up. APRA opened an investigation into possible breaches of the Banking Act 1959 by Westpac, its directors and senior executives after allegations by AUSTRAC that Westpac had failed to monitor and report millions of international fund transfer instructions.
ASIC suing CBA and CFS
ASIC is taking Colonial First State (CFS) and Commonwealth Bank (CBA) to court over $22 million in conflicted remuneration with allegations the issues were still occurring as late as June 30 2019. CBA and its investment arm CFS are being sued, with allegations that Colonial First State Investments paid conflicted remuneration to CBA for distribution of CFSI’s Essential Super Product. ASIC says about 390,000 people became members of the super fund as a result of the agreement, which ASIC believes is a contravention of the Corporations Act that bans conflicted remuneration.
