ASIC has forced additional conditions on boutique financial planning firm iPlan Financial Services in order for it to continue operating under an Australian financial services licence (AFSL).
The move follows concerns that Queensland-based iPlan entered into an agreement regarding an investment platform which created a conflict of interest, the regulator said in a statement.
“IPlan may have advised clients to transfer from existing financial products to the platform without disclosing a reasonable basis for the advice,” it said.
“The disclosures in relation to iPlan’s conflict of interest, relevant to the advice provided, were insufficient and a number of clients sustained financial detriment as a result of the advice.”
IPlan’s AFSL was varied to include conditions that require the business to undertake further communication with clients about how it manages conflicts.
The firm must also appoint an independent compliance expert to review its advice process and calculate payments to be made to clients entitled to compensation, ASIC said.
“The compliance expert will also review the advice provided to clients who invested in the platform and determine whether the advice complied with iPlan’s obligations under the Corporations Act,” it said.
“Financial redress, calculated by the compliance expert, will be offered by iPlan to affected clients.
“ASIC will continue to monitor iPlan’s compliance, via reports from the independent compliance consultant, for 26 months.”
Licensees often have a conflict of interest when recommending products to clients, ASIC senior executive leader of financial literacy, consumers, advisers and retail investors Delia Rickard said.
“We say it is up to them to manage these conflicts and, if a conflict exists, they need to make sure they demonstrate a reasonable basis for any product recommendations,” Rickard said.
