ASIC has outlined the process it will adopt when handing out warnings and reprimands if adviser misconduct doesn’t warrant a sitting of its Financial Services and Credit Panel (FSCP), with less serious cases falling short of the requirement to sit in front of the industry’s new single disciplinary body.
Under the new regime a warning will let the adviser know they should stop continuing the conduct cited, while a reprimand will “admonish” the adviser in relation to the conduct.
ASIC will send a letter electronically to the financial adviser outlining the decision, while a copy will be given to the current AFSL of the adviser whether or not the incident in question happened during the period they were licensed with that AFSL.
Warnings and reprimands will not be recorded on the ASIC’s Financial Advisers Register and the name of the financial advisers will not be published.
However, an exception could be made if the misconduct is already public knowledge and in the public’s interest.
The regulator will also publicly report on the warnings and reprimands it gives which is a requirement of its annual reporting duties.
The regulator can only give a warning or reprimand for an incident that happened from the start of this year and all decisions are reviewable by the Administrative Appeals Tribunal.
Because an adviser’s AFSL will receive a copy of the warning, the regulator will consider procedural fairness as the caution could have an adverse effect on the adviser’s reputation and livelihood.
“When providing procedural fairness, we will generally offer the financial adviser the chance to make a written submission about the proposed giving of the warning or reprimand,” ASIC said in a media release. “We will consider the submission before deciding whether to give a warning or reprimand.”
ASIC will decide if an adviser is entitled to procedural fairness on a case-by-case basis.
The FSCP was included in the Better Advice Bill which passed last year, becoming the primary channel by which misconduct is assessed and sanctioned and commenced at the start of the year.
The names of potential panel members wasn’t released until mid-February, doubling the pool of representatives.
The regulator announced it will use its discretionary powers to hold panels in circumstances beyond the prescribed events.
