Colonial First State (CFS) could adopt elements of the implementation plan its advisory group, Commonwealth Financial Planning (Commonwealth FP), must create as part of the conditions of its enforceable undertaking (EU).
ASIC announced yesterday it had agreed to accept an EU from the Commonwealth Bank of Australia-owned dealer group.
CFS general manager of advice Marianne Perkovic said Commonwealth FP had been working with ASIC and the EU agreement reinforced the group’s commitment to its “program of continued improvement”.
“We consider this an opportunity to strengthen our risk management framework and operating model, which supports our advisers and clients,” Perkovic said in a statement.
“Importantly, while this program is limited to CFP (Commonwealth FP), we will seek to implement its benefits across all of our advice businesses.”
She said a number of changes had already been implemented as part of the voluntary program.
The changes include the integration of administration systems; an enhanced focus on training and education; and the continuation of a detailed review program that examines the advice provided to affected clients.
Perkovic said an independent expert would be appointed to validate the effectiveness of the program.
“We are committed to implementing changes that will benefit our clients,” she said.
Representatives from Commonwealth FP will now face monthly views with ASIC.
Under the terms of the EU, Commonwealth FP would create an implementation plan and review its legal and regulatory obligations with specific emphasis on the provision of financial services, financial advice and the monitoring and supervision of representatives, the EU, dated 25 October, said.
The plan will also focus on reviewing the group’s operating model, individual operational procedures and external risk environment.
“The implementation plan is required to provide a detailed explanation of the approach taken, including methodologies and reporting lines,” the EU, signed by Perkovic, said.
“This includes clearly defining the corporate risk appetite used by CFP and its application to CFP’s risk management framework.”
The plan also required Commonwealth FP to provide an overview and list of all current work streams and commitments arising from the undertaking, as well as specify all operational stakeholders and business owners of each element of the plan, the EU said.
“CFP will meet with ASIC once a month or at times otherwise agreed with ASIC. The purpose of the monthly review meeting is to provide an opportunity for regular updates and reporting by the independent expert and CFP on the progress of the plan,” it said.
The EU follows Commonwealth FP’s own internal review into its operations after being forced to pay damages to clients linked to former adviser Don Nguyen.
In March, Nguyen was disqualified from providing financial services for seven years.
