[Archived User]

Would the 20 hours of CPD for a credit representative form part of the 30 hours of CPD for an authorised representative, or in addition – ie 50 CPD per annum for an adviser providing credit and financial advisory services?

[Archived User]

Adam

We grappled with this issue for quite some time as we viewed it as somewhat impractical for an adviser leaving our ASFL to have to provide copies of files, soft or hard, especially when there could be several hundred.

As part of the adviser’s agreement in joining our AFSL an adviser is required to retain client information for 7 years and provide us with access to them. When they leave, we also require them to sign a deed which stipulates that they will continue to provide us with access to their files up to the 7 year period, even in circumstances where they move to further licensees during this period.

This provides us with protection in the event of complaints and puts the onus on them if client information they had is not available to us.

Hope this helps,

James

[Archived User]

With advisers moving licensees, it is definitely difficult to retain access to client files. Complaints tend to come in years after the advice, so the chances that an adviser has left the licensee increase.

I’d be interested to how others are ensuring access to files; I am looking at implementing a requirement to store documents in an online format that the licensee can access immediately, or otherwise for the adviser to provide electronic or hardcopy documents to the licensee.

[Archived User]

Did this legislation ever get passed, are Warrants a financial product that require a variation to an AFSL?

[Archived User]

Technically, yes.  You can be a responsible manager of more than one credit licensee.  However, approach with caution.

You must be aware of your role as a responsible manager

It is through its responsible managers that a licensees maintain competency.  The competency requirements are summarised in ASIC’s RG206. In addition, ASIC considers that responsible managers should be:

1) responsible for the quality of the credit activities the licensee provides;

2) responsible for managing the credit activities;

3) make management decisions in relation to credit activities; and

4) ultimately responsible for day to day decisions in relation to the provision of the credit activities of the licensee.

So, responsible managers maintain competency.  Their primary role is not to “ensure compliance”.

You must appropriately manage issues that may impact your ability to appropriately fulfill this role

Here’s a couple of issues to consider:

Availability 

As a responsible manager, you will in theory be participating in significant day-to-day decisions about the credit activities engaged in by the licensee.  This means that you must have enough time available to do so.  As you state, this does not necessarily mean that you must devote ‘full time’ to each licensee.  The extent of the commitment depends on:

a. the credit activities engaged in by the licensee;

b. the number of representatives who will engage in credit activities;

c. the size, diversity and structure of the licensee; and

d. whether the licensee’s main business is credit activities.

Conflicts of Interest/Confidentiality

You need to consider whether you will be conflicted in your roles as a responsible managers for more than one licensee. There are a couple of issues here:

a. Confidentiality.  You are likely to be privy to information regarding each credit licensee’s operations.

b. Conflicts. There is a higher risk of a conflict between your duty as a responsible manager to make management decisions in relation to each licensee’s credit activities.

ACL conditions

A final point to consider how each licensee’s credit licence conditions impact responsible managers.  First, check if you are (or will likely be) a key person condition of each licence.  You are likely to be a key person if you are the sole responsible manager for that licensee.  Second, remember that it is a condition of every ACL that the responsible manager undertake a minimum of 20 hours CPD per year.  The licensee can determine how your CPD hours are to be attained.

Author: Kathryn Wardrobe

[Author]

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