Although the role of a responsible manager of a financial services licensee is not specifically defined in the Corporations Act, ASIC has announced it has specifically banned two responsible managers of a licensee from providing financial services for a period of 10 years for failing to adequately monitor and supervise the licensee’s authorised representatives and maintain competence to provide the financial services covered by its licence.
ASIC says it cancelled the AFS licence of National Advice Solutions because it adopted a ‘layered advice’ strategy whereby the licensee separated the advice into pre-determined topics, regardless of the client’s personal circumstances, goals or advice needs.
The responsible managers were members of the Compliance Committee and the responsible managers of the AFS licence. Mr Carcallas also performed an audit function.
ASIC said that a responsible manager is expected to assess strategies and policies used within the business and ensure that they are consistent with the obligations of the licensee. ASIC found that the two responsible managers bear part of the responsibility for the systemic failings that arose from the use of the ‘layered advice strategy’.
Mr Carcallas also provided financial advice to clients. In a sample of advice provided by Mr Carcallas, ASIC found he did not act in the best interests of clients, the advice was not appropriate, and he prioritised his interests (or that of the AFS Licensee) over the interests of the client.
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Author: David Jacobson
Principal, Bright Corporate Law
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The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.
