Being able to sever ties with an adviser who is breaching your
AFS licence obligations is an important consideration for
licensees.
You should be sure that your authorised representative
agreements provide you with sufficient ability to terminate
advisers at short notice for material compliance breaches. You
should also be careful about the representations your internal
auditors make to advisers. If auditors get this wrong, an adviser
can develop a false sense of security about their appointment.
These are important reminders arising from the recent case of McDonald
v AMP Financial Planning Pty Ltd. The case also includes
useful judicial commentary on the best interests obligations,
personal advice and the use of ROAs.
