FAAA hits product providers over adviser attestations

Financial services product providers are unfairly failing to accept attestations from financial advisers on the identity of long-term clients, according to the Financial Advice Association of Australia (FAAA).

The result is that advisers are being put to the time and cost of reverification.

In a submission to AUSTRAC responding to proposed changes to guidance around customer identification, the FAAA has reinforced the role played by advisers not only in identification but also in terms of identifying instances of financial abuse.

However, in doing so, it said that the FAAA is concerned about inconsistency between AUSTRAC guidance and AML/CTF and the ongoing CDD programs implemented by some financial product providers.

It suggested that some product providers were simply not appropriately accepting the status of financial advisers as being capable of providing attestations.“Financial advisers and financial planners are ‘approved licensed or registered occupations’ under the Statutory Declarations Regulations 2023. Hence, a financial adviser can provide a referee statement attesting to the identification of a customer with non-standard documentation,” the FAAA said.

“However, some product providers will not accept financial advisers’ attestation that an existing and long-term advice client is who they say they are, rather insisting on reverifying identification every 12 months, even if the client’s identification remains current and unchanged,” the submission said.

“The financial adviser must unfairly wear the cost and time involved in this seemingly unnecessary reverification of client identification. This has included requests to reverify a client’s driver’s licence, even though in some states a driver’s licence can be issued for up to 10 years,” the FAAA said.

Elsewhere, the FAAA submission said that financial advisers are deeply concerned for the victims of financial abuse and are uniquely positioned to detect signs of financial abuse due to their close relationships with clients and their families.