A former director of AAA Shares and AAA Financial Intelligence has said the banned planning business repeatedly received written reports warning against non-compliance prior to the Australian Securities and Investments Commission’s (ASIC) cancelling its licence.
Former AAA director Ken Wybrow – who left active duty at AAA in 2007 – told InvestorDaily he had been involved in auditing the company in his role as compliance director of Adelaide-based compliance firm Acompli since June of that year.
Acompli is the “external party” mentioned in the ASIC guidance as being engaged to provide audit services, and according to Mr Wybrow, it repeatedly offered advice to AAA.
“We audited AAA advisers at least once a year on their instructions,” Mr Wybrow said. “We submitted reports recommending extensive remedial actions that were required.”
“To an extent, these recommendations were ignored by AAA.”
In addition, Accompli raised concerns over the actions of 30 to 35 of AAA’s authorised representatives with the company’s directors, a number of whom “should not have been working in financial services”, Mr Wybrow said, backing up ASIC’s finding that AAA advisers were not necessarily sufficiently qualified to provide advice.
Mr Wybrow left AAA amid concerns over the company’s compliance and record-keeping procedures, three years prior to the commencement of ASIC’s surveillance of AAA.
“In the past three weeks, AAA has not requested our advice, though there is probably little we can do for them now,” he said.
In detailing the reasons for cancelling AAA’s licence, ASIC stated that as well as concerns over non-compliance and the qualification level of affiliated advisers, it determined that AAA had implemented a business model in which cash flow was correlated with the number of advisers admitted to the network.
“Licensees have a general obligation to do all things necessary to ensure they provide financial services efficiently, honestly and fairly,” ASIC commissioner Peter Kell reiterated in a statement accompanying the released information.
“AAA Financial Intelligence was found to have an appalling record that put at risk the quality of advice it provided to retail clients.”
