Prepared by Nicholas Cardone
ASIC has accepted an enforceable undertaking from Breakaway Finance Group Pty Ltd (a financial planning firm) and its sole director Mark Roberts.
ASIC found that Breakaway Finance Group Pty Ltd did not tailor its policies and procedures to its actual operations and did not adequately manage its conflicts of interests. ASIC also found that Mark Roberts failed to comply with his best interests duty on multiple occasions by not fully ascertaining his clients’ circumstances before giving advice and recommending insurance cover that his clients could not afford. He also failed to provide switching advice warnings in SOAs when recommending clients to switch products.
ASIC has cancelled Breakaway Finance Group Pty Ltd’s AFSL and banned Mark Roberts from the financial services industry for two years.
Given the severity of these consequences, now is a timely opportunity to conduct the following:
- determine whether your actual operations have deviated form those set out in your policies and procedures – amendments to these policies will be required if you have implemented different/additional practices;
- ensure that the best interests duty is fully understood and implemented within your team – when giving advice, a fact-find should always be conducted to fully ascertain your client’s circumstances (even for long-standing clients). Kit Legal have assembled a fact-find template and best interests checklist which will guide you in this respect;
- ensure that all required disclosures in SOAs have been made (and will be made in the future) – a file review could help you determine your overall compliance.
Please get in touch with Nick if you would like more information about the AFSL services we can offer.