Australian Securities and Investments Commission (ASIC) has urged Australian Financial Services (AFS) licensees to review and correct information about their financial advisers on the Financial Advisers Register following a spot check that revealed errors and inconsistencies in the recorded data.

This move also has significant implications for FX/CFD brokers, as ASIC's spot checks have revealed widespread inaccuracies.

ASIC Calls on AFS Licensees to Rectify Financial Adviser Records

The regulator identified several issues, particularly concerning qualifications and training courses incorrectly marked as “approved” on the register. Common errors included mismatched qualification wording, listing professional designations as approved qualifications, and marking bridging courses or non-approved qualifications as approved.

ASIC emphasized the importance of accurate record-keeping, stating, "It is a serious offense to knowingly provide false or misleading information to ASIC or to fail to take reasonable steps to ensure that the information provided to ASIC is true and correct."

The regulator has called on AFS licensees, including FX/CFD brokers, to immediately verify all information about their financial advisers on the register, with a focus on approved qualifications, tax advice service capabilities, and contact details. Licensees are required to rectify any inaccuracies by lodging a “maintain” transaction via ASIC Connect.

In response to these issues, ASIC has announced changes to the public-facing Financial Advisers Register. From July 1, 2024, the register will no longer display whether a financial adviser's education and training meet the requirements of an “approved'” qualification. This change aims to reduce confusion and minimize risks to consumers.

Moreover, AFS licensees must now inform ASIC upon receiving a written declaration from a financial adviser who qualifies for the experienced provider pathway. This pathway permits seasoned advisers to comply with qualification standards without further education.

New Initiatives

ASIC plans to launch a compliance program on August 1, 2024, to ensure the accuracy of approved qualification information on the register. The regulator warned it will consider enforcement action where necessary, particularly in the lead-up to January 1, 2026, when all financial advisers must comply with the qualification standard.

Additionally, ASIC urged market intermediaries to enhance their oversight of business communications. In response to concerns over the use of unmonitored and encrypted communication channels in business transactions, the regulator published a new information sheet.