The Australian Securities and Investments Commission (ASIC) has imposed additional licence conditions on biggest financial planning group, AMP Financial Planning, to ensure that it had adequate arrangements in place to comply with obligations related to the provision of managed discretionary account (MDA) services.
The conditions were imposed when ASIC granted AMP FP application to vary its Australian financial (AFS) licence to provide managed discretionary account (MDA) service, the regulator said.
The surveillance included interviews with compliance personnel about processes and systems, and with the advisers who provide MDA services and advice as well as reviews of AMP FP’s documented processes and systems.
According to ASIC, MDAs created particular risks for retail clients because when a client entered into a contract with an MDA provider, they gave the provider authority to make investment decisions on their behalf on an ongoing basis without seeking the client’s prior approval.
The conditions would help ensure that the group would adequately monitor and supervise the MDA services provided by its advisers, and that its advisers would be adequately trained and meet their best interests obligations.
ASIC Commissioner Danielle Press said: “ASIC will impose licence conditions based on what an applicant is seeking authorisation for, what we know of them, and what we may see during the application assessment process.
“New licence applicants and licensees seeking variations can expect to see ASIC tailor licence conditions more often.”