ASIC hits 2 AFSLs over unregistered advice

The Australian Securities and Investments Commission (ASIC) has hit two financial planning licensees with infringement notices for allowing financial advisers to provide personal advice while being unregistered.

The regulator named Sky Money Pty Ltd and Smart Financial Capital Pty as the two licensees who have been required to pay infringement notice penalties of $31,300 on 1 July and 11 July respectively.

ASIC noted that payment of the infringement notice did not represent an admission of guilt or liability.

The announcement said ASIC had acted because it had reasonable grounds to believe that the licensees had authorised a financial adviser who gave personal advice to a retail client in relation to relevant financial products while the adviser was unregistered.

It said failure to register a financial adviser creates a risk for consumers who may receive personal advice from unregistered advisers. The registration requirement is an important consumer protection mechanism to ensure AFS licensees have considered and received declarations about whether their financial advisers are fit and proper and meet the education and training standards.

Each AFS licensee immediately registered their financial adviser and reported the breach to ASIC after becoming aware of their individual being unregistered. ASIC had regard to these circumstances in deciding its approach to taking enforcement action.