Adviser learns her fate from FADC

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The Financial Advisers Disciplinary Committee (FADC) has handed down its penalty to an adviser who failed to keep proper records.

Monday, March 8th 2021, 7:10AM 5 Comments

The adviser at the centre of an FADC hearing in December last year has been censured for her breaches of two Code Standards.

However, the adviser, who can't be named, now calls herself retired and has told the Financial Markets Authority she will wind up her practice by March 31. Good Returns understands she had not applied for a transitional licence to operate under the new regime which starts next week.

The adviser was found to have breached Code Standards 12 and 15 of the Code of Professional Conduct for Authorised Financial Advisers. She had failed:

(a) In the case of three clients, to record in writing adequate information about a personalised service provided to a retail client.
(b) To demonstrate adequate knowledge of the relevant legislative obligations which result from the term ‘personalised service’.

The FADC said her breaches of the Code are less serious than other cases that had come before the committee.

"There is no suggestion that the Respondent has improperly benefited at the expense of her clients, or that any client has been disadvantaged. There are no previous findings of misconduct against the Respondent."

However, the breaches are "not to be treated lightly".

"Record keeping is a fundamental duty of an adviser that underpins the supervisory regime established by the Act and its importance cannot be minimised. It’s therefore important to sanction breaches where there are multiple instances of poor record keeping.

"There is a need to reinforce professional standards and ensure the profession remains conscious of the significance of proper records."

The committee said the breaches of the two code standards came down to a misunderstanding of personalised service, and the obligations providing a personalised service engages (including record keeping).

"Personalised service is a core concept in the Act: it is a gateway to many of the Act’s disclosure obligations (which, in turn, are central to the Act’s scheme for informing and protecting the public). A fundamental failure to understand what it means (and therefore when the ensuing obligations are triggered) means some disciplinary action is warranted."

The breaches of CS 12 and CS 15 come down to a misunderstanding of personalised service, and the obligations providing a personalised service engages (including record keeping). Personalised service is a core concept in the Act: it is a gateway to many of the Act’s disclosure obligations (which, in turn, are central to the Act’s scheme for informing and protecting the public).

"A fundamental failure to understand what it means (and therefore when the ensuing obligations are triggered) means some disciplinary action is warranted."

Tags: FADC

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