The corporate regulator investigated 65 cases where Australian Financial Services (AFS) licence holders had also been appointed as authorised representatives by another AFS licensee. Accountants providing financial advice, limited or otherwise, are captured under the AFS regulations.
Of the 65 cases investigated, ASIC found that 58 were in breach of the law, as per section 91D of the Corporations Act 2001.
Only a general insurance underwriting agent or broker operating under a binder given by an insurer has exceptions for dual authorisation.
For ASIC, dual authorisations are problematic because they pose a risk to consumer protections.
“For example, an AFS licensee may not maintain professional indemnity insurance (PII) or membership of an external dispute resolution (EDR) scheme because they are operating as an authorised representative of another licensee,” ASIC said.
“However, because their authorisation is void under the law, the licensee providing advice as an authorised representative will not have access to their AFS licensee’s PII and EDR scheme. This poses an unacceptable risk to their clients.”