ASIC letters inbound for unregistered licensees
SMSF practitioners holding an AFS licence, including a limited licence, have been urged to register with the Financial Advisers Register or risk suspension from ASIC.
Speaking at a SuperCentral seminar, ASIC senior manager, financial advisers, Ella Cebon, said the corporate regulator will start sending out letters in 2018 to licensees who have yet to appoint anyone to the register, to remind them of their obligations.
According to ASIC, the Financial Advisers Register is a register of individuals who are authorised to provide personal advice to retail clients on investments, superannuation, including SMSFs and life insurance. It contains details of where the adviser has worked, their qualifications, training, memberships of professional bodies and what products they can advise on.
The appointment process to the Financial Advisers Register does not occur automatically upon receiving an AFSL, with licensees required to register through ASIC Connect.
“From our communication so far, it seems that some limited licensees are confused about their obligations. You can be both a licensed holder and a financial adviser if you're a real person,” Ms Cebon said.
“We've had a number of people write to us and say the reason they haven't appointed any advisers to the register is that they don't authorise anyone else, that they are a sole practitioner and they are the only one providing advice. If you are a sole practitioner you are still required to be on the financial advisers register.”
“So if you haven't appointed any financial advisers to the register, or you think some may be missing, we really encourage you to update the register before you receive a letter from us,” she added.
“We'll be sending out the majority of the letters out in the new year and after we send these letters, if we find that licensees are still not complying with their obligations in relation to the register, we will consider regulatory action such as suspending license.”
Ms Cebon also noted a common misconception in licensees registering as both an authorised representative and a financial adviser.
“There is a difference between being an authorised rep and being a financial adviser — an authorised rep is a particular type of authorisation that a licensee can give a person; an authorised rep can be either a corporate authorised rep or a human being,” added Ms Cebon.
“Financial advisers can only be human beings and the register is a register of human beings.
“You can notify being both an authorised representative and a financial adviser by checking both boxes on the online form and paying only one lodgement fee but if you don't tick both boxes, again it won't be updated automatically and we're finding that's another common misconception.”