The corporate regulator has warned Australian financial services licensees about failing to meet requirements and thereby taking shortcuts when witnessing signatures on binding death benefit nomination forms for superannuation benefits.
In a statement, ASIC said that it has “become aware of a widespread practice” among advisers to witness (or have their staff witness) client signatures on the forms without being in the presence of each signatory.
The regulator added that some death benefit nomination forms are being backdated, which it noted is another failure to comply with the law, and that both cases could result in the nominations being invalid.
“Improper and unethical practices around binding death nomination forms can lead to very poor consumer outcomes,” said acting ASIC chair Peter Kell.
“Advisers, licensees and their staff who engage in these practices should consider this a final warning. AFS licensees have ultimate responsibility for the conduct of their representatives and need to effectively monitor and supervise their representatives.”
ASIC said that failure to properly witness death nomination forms can potentially result in those nominations being rejected, causing delays and uncertainty in the payment of death benefits.
“Australian financial services licensees and advisers have a professional and legal obligation to comply with the law,” the statement said.
“Taking shortcuts which result in important forms being invalidated and thereby jeopardising the account holder’s wishes does not meet the minimum advice and conduct standards expected by ASIC.”
The corporate regulator has told the Hayne royal commission that it is at a loss over how to successfully prevent misconduct in financial se...
APRA has announced the terms of reference for the upcoming review that will examine the regulator’s enforcement strategy. ...
APRA has proposed changes to the application of the capital adequacy framework for authorised deposit-taking institutions to support orderly...