If you asked a simple question to any “Head of Risk and Governance” within the Financial Services industry today, you are likely to get the same response.
The question: What keeps you awake at night?
The response: Right now, I can’t guarantee that all of our representatives are operating within the regulations. The reputational risk and cost associated with a breach of regulations would be significant
Many of our financial institutions have undertaken an enforceable undertaking with ASIC and whilst this certainly serves to improve risk management frameworks, the cost associated to the undertaking is considerable in terms of financial and reputational aspects.
ASIC today announced it has accepted an enforceable undertaking (EU) from Commonwealth Financial Planning Limited (CFP) following an investigation into the provision of advice by some of its financial advisers. CFP is a wholly owned subsidiary of the Commonwealth Bank of Australia (CBA) and operates under the advice business structure of Colonial First State, which is also part of the CBA. CFP has agreed to conduct a comprehensive review of its risk management framework and legal and regulatory obligations regarding the provision of financial services, financial advice and the monitoring and supervision of its representatives.
ASIC accepts enforceable undertaking from Commonwealth Financial Planning
Enforceable undertakings register
The corporate regulator is investigating a number of financial advisers employed by one of the Commonwealth Bank’s businesses, Commonwealth Financial Planning. The investigation came to light yesterday, as CFP entered into an enforceable undertaking with the Australian Securities and Investment Commission over regulatory concerns identified in relation to one of CFP’s former star advisers, Don Nguyen. Mr. Nguyen was employed by CFP as an authorised representative between October 2003 and July 2009, working in the bank’s Chatswood branch. The bank agreed last year to a major client compensation program, and has settled a multi-million dollar class action bought by clients.
Leonie Lamont, The Sydney Morning Herald