Considering compliance to enhance your business value?
Compliance transcends mere rule-following; it’s about boosting business value through a dedication to integrity and operational excellence. Amid ongoing litigation and client file reviews, our expert insights reveal how strong compliance standards can be a substantial financial asset, while non-compliance can wreak financial havoc.
Compliance ensures that a company operates within legal parameters, sidestepping hefty fines and legal expenses. It also strengthens a company’s reputation, builds customer trust, and can lead to new business avenues. Moreover, it streamlines operations, potentially reducing costs and improving efficiency.
Cheyenne’s top tips for assessing business value:
- Evaluating recommended advice strategies,
- Financial product recommendations,
- Examining complaints and breach registers,
- Ensuring fee structures and promised services are timely delivered to clients,
- Conducting background checks on advisers and business owners,
- Engaging with clients to understand the compliance culture and their loyalty to current advisers, which affects client retention in the long term.
Planning to buy or sell in 2024? Let’s discuss your future endeavors.
Join our community focused on compliance at the Brisbane Compliance Forum on Thursday, May 2nd.
Embark on an exploration with our special host, David Jacobson, as we delve into the complexities of addressing ASIC in our inaugural interactive investigative workshop.
ASIC Investigative Workshop: Guest Guide David Jacobson
Date: Thursday, August 1st
Time: 1:30 – 3:15 pm
Venue: Level M, Jager Room | 200 Mary Street, Brisbane
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If you have joined the Brisbane Compliance Community at a Forum event and haven’t given feedback. Click here. Let’s make it great together.
Professional Indemnity Insurance, are you really covered?
Greg Hansen, Professional Services Risk Specialists recently joined the Brisbane Compliance Community, sharing claim stories that underscored common misconceptions about Professional Indemnity Insurance coverage. This includes areas like Adviser Fraud, AFSL Approved Products, and the appropriate timing for reporting to insurers in the absence of a claim. For Greg Hansen’s top risk protection tips for AFSL Holders and Advisers, click here.
Greg’s insurance issues to consider:
What limit are you insured up to for a fraud claim?
A number of these claims are for massive amounts. We have a lot of claim examples that go over $2m. Underinsurance can mean liquidation for the business. I have seen large AFSL Holders with over $10m in revenue, some at $20m with more than 30 Advisers under their license buying 8 PI policies, but all only have a $2.5m limit for any one claim. You are far better off insuring for that catastrophe event that threatens your license– having one limit of $10m is far better than eight policies with a $2.5m limit.
AICS Auditors – Simple tips to improve Advisor’s audit results.
It is encouraging to see the uptake of AI technology for client meeting files notes by advisers. Our simple tips to add into the process to improve the effectiveness of file not for compliance purposes:
- Before recording request consent to record the meeting.
- Once AI recording begins including the following statement:
- Consent to record the meeting
- Location of meeting
- Time of the meeting
- Introduce the meeting attendees by name
- Purpose of the meeting
Rethink your next social media video post.
The cascading events of the use of AI deepfake recreation.
Just when embracing video content has been embraced as the marketing norm for building authenticity and connection. We have this recent fraud case where a finance worker pays out $25m after a video call showcasing the danger of AI technology. Here’s the cascade of events:
- Finance worker rec’d an email request to transfer $25m secretly
- CFO called video conference call (included several other team members)
- Instructions provided to transfer the money
- CFO and several other team members were all deepfake recreations
- Team members had looked and sounded just like his colleagues
- He believes everyone was real
As we say in compliance it is not a matter of “if but when”. How would you have responded whether it is $100 or $25 million? At what point would you have identified the risk?
ASIC Report 781 – May 2024
Trustees to become the new Regulators!!!
‘At the heart of the harm to consumers is poor conduct by financial advisers and financial advice licensees.’
Review of Super Trustee Practices: Protecting members from harmful advice charges
Super Trustees have responsibilities to protect members:
- Advice fees charged are consistent with authorisations
- Best financial interests’ duty and Sole Purpose Test
Recommendations for AFSL Holders:
- Regular checks of advice documents (risk & random)
- Advisers checked against ASIC Registers
- Implement appropriate Fee Caps
- Understand the licensee’s business
- Implement watchlists to identify potential harm
- Fee labels to be clear and self-explanatory
