According to a statement from ASIC, surveillance by the corporate regulator found the dealer group had not complied with its general obligations as an AFSL holder, including failing to properly supervise its authorised representatives.
“The weaknesses in Guardian Advice’s systems and controls show that there was an ongoing risk that unsuitable advice could be provided by Guardian Advice and its authorised representatives,” ASIC deputy chairman Peter Kell said.
The statement said ASIC’s surveillance across Guardian Advice’s business found instances where there was not a demonstrated reasonable basis for the advice provided and also files that did not evidence the advice given was in the best interests of clients.
It also said Guardian Advice did not have adequate arrangements in place to ensure it was complying with its general obligations as an AFSL holder.
ASIC’s statement acknowledged the cooperative and constructive approach that Guardian Advice has taken in response to the concerns raised by ASIC.
A spokesperson for Guardian Financial Planning said the company was taking the findings seriously and would work with ASIC to implement the measures.
“The life insurance and advice industries are undergoing widespread reform and GFP accepts that it is appropriate that there is greater scrutiny of these industries,” the spokesperson said.
“GFP is confident it can seize this opportunity to improve our business, including improvements in adviser recruitment, training and adviser audit processes.”
Under the conditions announced by ASIC, Guardian Advice must appoint an ASIC-approved independent consultant to review its compliance with its general licensee obligations and develop a plan to rectify any deficiencies identified by the expert.
The expert will report regularly to ASIC over the next two years on Guardian Advice’s implementation of the plan, and ASIC may publish the results of the reports, according to the ASIC statement.
ASIC confirmed it has ongoing inquiries and will consider enforcement action or other regulatory action such as bannings of individual advisers where inappropriate advice was provided.
