CORPORATE GOVERNANCE

Our corporate governance program is designed to consider business strategy, risk management, business processes and people.  We focus on addressing potential legislative change and providing strategies and solutions.

Representative Manual

The Representative Manual (also known as the Compliance Manual) sets out your obligations and duties under the Representative entered into between you and The Advice Exchange. It is important for you to read this manual and make yourself familiar with the professional standards to be adopted and expected of you by The Advice Exchange. This manual is to be read in conjunction with all TAE policies.

Breach, Incident & Complaint Reporting

What is a Breach?

A breach is any failure to comply with applicable laws, regulations, license conditions, applicable industry standards and codes, approved policies, frameworks, standards and guidelines, including delegations, authorities and limits. This definition includes all actual, potential, and likely breaches of regulatory and legislative obligations.

Examples of a Breach:

An incident can escalate into a potential or significant breach. However, there are some issues that will be an automatic breach:

  • Employee or third-party theft or deceit;

  • Data loss due to inadequate data security systems;

  • Disclosure of client’s details to another business outside of our privacy requirements;

  • Legal action due to misleading advice;

  • No advice document when personal advice has been provided to the client;

  • The advice is not in the best interests of the client;

  • Failing to notify a product provider of a significant dealing which is inconsistent with the product’s Target Market Determination (TMD) within 10 business days; and

  • Any breaches of the regulations;

Examples of a Significant Breach:

  • Breach of any civil penalty provision (s1317E) which is deemed to be a failure to comply with most legislative requirements in Chapter 7 of the Corporations Act;

  • Where the provision breached is an offence involving imprisonment for 12 months (or 3 months for dishonestly offences);

  • Misleading and deceptive conduct under sections 1041H and 12DA(1) ASIC Act;

  • Breaches that result or are likely to result in material loss or damage to clients;

  • Significant breach of a core obligation (section 912A and Financial Services Law in 761A(A) (a) - (c))

  • Gross Negligence;

  • Serious Fraud

  • Investigations ongoing for greater than 30 days; and

  • Other licensees’ adviser misconduct.

What is an incident?

An incident is any event that has direct monetary, regulatory or other economic impact due to inadequate or failed internal processes, methodologies, people, systems or external events.

Examples of Incidents:

  • Statement of Advice (SoA) delivered outside the time critical period of five business days after providing verbal advice

  • Not providing a Financial Services Guide (FSG) to an existing client when providing further advice after the FSG had changed since providing the previous advice

  • Providing a Record of Advice (RoA) to an existing client when there were signifcant changes to the client’s personal circumstances

  • Not following the complaints handling process

  • Non-compliance with any TAE business policy or guidelines

  • Loss due to external events such as a natural disaster

What is a Complaint?

A complaint is any expression of dissatisfaction made to or about a business which relates to its products, services, staff or our handling of a complaint where a response resolution is explicitly or implicitly expected or legally required. A complaint can be made by phone, email, social media post or in person.

Examples of Explicit Complaints:

  • A client clearly states that they do not believe that you have met the condition of the ongoing service agreement you have with them and requests a refund of all fees or part fees

  • The client states that you did not fully and clearly explain to them the risk involved with the investment you recommended and implemented for them and as a result the client has made a loss due to poor or inadequate advice that they were provided

  • The client states that you did not bring to their attention the Capital Gain Tax (CGT) situation of transferring their asset held outside of super to a platform inside of super and now they have a CGT bill to pay and expect you or the AFSL to make restitution

  • The client states that you do not explain to them that by replacing their previous held life risk cover with a new one they would lose their non-avoidance conditions of the “innocent non-disclosure” protection they had under their old policy

Examples of Implicit Complaints:

  • I am worried about the level of risk I am now taking since you advised me to roll my funds over to a new investment which has higher exposure to International and Australian shares, and we are experiencing a lot of volatility in the share market

  • I have not heard from you or receive any advice since investing my money in the fund you recommended, and the market seems to have been losing ground and I would have liked to have heard from you

  • I am concerned about the returns on my investments, they are not performing as well as expected or suggested.

What are you required to do:

All practices are required to keep a Register and Report all Incidents to The Compliance Team with in 24 hours.

All Incidents and Complaints must be reported to The Compliance Team within 1 business day of being made aware via compliance@adviceexchange.com.au, ensure your email contains all information regarding the incident. We will guide you through any further action steps required. Have your incident register available for review at your compliance audits.

Compliance Documents

Please refer to our Client File Review Checklist below to gain insight into what we look for when reviewing your client files. To ensure TAE advisers demonstrate best practices and a client centric approach we mandate a prevett process, open the link below for further details.

FOFA

Future of Financial Advice (FoFA)

The Future of Financial Advice (FoFA) reforms focus on improving the quality of financial advice, particularly product recommendations, and expanding the availability of more affordable forms of advice. Following several incidents of poor advice leading to significant client losses, the reforms are intended to improve investor protection and instil confidence in the financial advice industry.

Best Interest

From 1 July 2013, an adviser providing personal financial advice to a retail client must act in the best interests of the client. In the case of conflict between the interests of the client and those of the adviser, the licensee, the authorised representative and their associates, the adviser must give priority to the interests of the client. Please read the document below for guidance in relation to the Best Interests Duty.

PI Certificate of Currency

We have completed our PI insurance renewal process for the group for 2024/2025.

Please feel free to contact our office at admin@adviceexchange.com.au or call to discuss, particularly if you would like to discuss any concerns or obstacles that you feel that you are facing in the compliant operation of your business.