Call for advisers to audit each other

• Tweet

Senior financial advisers should set up a system to audit each other for compliance with things such as the Anti-Money Laundering legislation, the Institute of Financial Advisers says.

Thursday, April 17th 2014, 6:00AM 3 Comments

by Susan Edmunds

The AML/CFT supervisors have published a user guide to the annual report that reporting entities will be required to fill in every year on their risk assessment and AML programme. The first report is due August 30.

The report covers things such as where the business is based, its risk assessment processes and details of its audits.

Providers are asked to estimate the number of transactions settled during the year, the number of customers they dealt with, the channels through which they found their customers and to provide details of mortgage lending, other finance arrangements, investments, and insurance.

IFA president Nigel Tate IFA president Nigel Tate said professional bodies were meeting the FMA today to discuss the requirements because many of the things requested in the AML report are duplicated in other reporting requirements. “We want to make it easy for people to comply.”

He said AML was an issue for advisers, particularly when it came to audits. “The regulations have spawned a huge marketplace of entities setting up compliance companies to run audits and it’s just adding to the burden for each of these advisers.”

Companies were charging anything from $500 to $2000 for an audit, which has to be done every two years. At the moment, the guidelines allow an independent person to perform an audit and says that reciprocal audit arrangements with a similar company should be considered.

Tate said when there was more information available about what was expected from an audit, he hoped to be able to set up a system where senior practitioners could do peer audits for a couple of hundred dollars.

He said it would provide industry learning opportunities for the advisers and the wider industry.

It would be a better option for advisers than paying a firm to do it, he said. “I could name half a dozen companies that have been established specifically to do this sort of work, it’s compliance for compliance’s sake.”

Tate said he was also lobbying for all of the reporting advisers have to do to be required at the same time each year. “Invariably, some will forget and miss the deadline. If they have to do it once a year and it’s in synch with their authorisation, it would be much simpler.”

Comments from our readers

Sign In to add your comment