Are you up-to-date with your obligations as a financial professional? Five quick questions

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Are you up-to-date with your obligations as a financial professional? Five quick questions

We recently looked at some key regulatory changes in the financial services sector affecting both the FinTech and banking industries. A common theme through these changes is a clear commitment to cracking down on unethical and unprofessional behaviour in the sector. Furthermore, there is an ongoing Senate committee inquiry into the ‘Scrutiny of Financial Advice’, reviewing the current regulatory framework for financial advisors. We will have to wait until the committee reports back on 30 June 2017 to see if further changes lay in store for the sector.

In the meantime, here is a five-question mental checklist for all those in the industry:

1) Have I kept pace with the latest industry and economic trends?

In order to provide accurate and timely services to clients, all financial professionals need to be familiar with the latest facts and stats. Key sites to keep tabs on for general economic and financial data are those of the Australian Bureau of Statistics, Australian Securities & Investments Commission (ASIC), Australian Prudential Regulation Authority (APRA) and the Reserve Bank of Australia.

2) Am I familiar with the law that governs my profession?

Financial professionals are subject to a vast array of statutes, regulations and case law, depending on the particular service provided. For advice specific to your industry, consult a professional. Legislation which may apply to you includes:

• The Corporations Act 2001
• The Corporations Amendment (Future of Financial Advice) Act 2012. See also the associated Regulations.
• The Competition and Consumer Act 2010
• The Anti-Money Laundering and Counter-Terrorism Financial Advice Financing Act 2006
• The National Consumer Credit Protection Act 2010.

3) Do I hold the appropriate licence?

In general, anyone who runs a financial services business must have an Australian Financial Services (AFS) licence, including those who provide financial advice and deal in financial products. In a previous article, we described how some Financial Technology ‘FinTech’ products and service are exempt from this requirement. If in doubt whether your product or service must be licensed, seek professional advice.

4) Have I paid all the compulsory levies that apply?

We discussed previously a new levy that will shortly apply to the five biggest banks. Keep in mind though, that there are a range of other compulsory levies that apply to financial services and are set annually by the Government. These levies are intended to cover the operational cost of government regulators such as ASIC and APRA. These levies include the Authorised Deposit-taking Institutions Supervisory Levy and the Authorised Non-operating Holding Companies Supervisory Levy.

5) Which professional standards apply to me?

Alongside Legislation and licensing requirements, members of specific professions must adhere to standards set by their professional body. For example, members of the Financial Planning Association of Australia (FPA) are subject to a strict Code of Ethics which sets out the key principles that must guide the work of an FPA member. This includes the requirement to place a client’s interests first and to always act with integrity.

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