In a statement, ASIC said it’s surveillance followed PGW’s appointment of a number of ex-representatives of AAA Financial Intelligence Limited (AAFI) and AAA Shares after it’s AFSLs were cancelled by ASIC in February last year.
“'We would expect licensees who take on representatives previously authorised under licensees that have been the subject of ASIC action to be especially prudent, recognising they may have been exposed to a less robust or non-compliant supervisory environment,” ASIC deputy chairman Peter Kell said.
“Licensees must ensure they have appropriate resources and procedures in place when providing financial services to retail clients.”
“These arrangements should be reviewed when licensees rapidly increase their numbers of representatives, particularly where those representatives have come from other licensees.”
Specifically ASIC identified “numerous instances” where financial product advice provided by PGW to clients did not demonstrate a reasonable basis for the recommendations made and compliance with disclosure obligations when switching financial products.
ASIC said it also had concerns that PGW failed to access the competency of representatives before their appointment, ensure authorised representatives had adequate training and respond to failures identified during audit processes.
In response to ASIC’s concerns, PGW has agreed to “implement a regime of supervision, review and audit” by an ASIC–approved compliance expert for a period of at least 15 months.
ASIC acknowledges PGW's cooperation and constructive engagement throughout the process.
