Audit cost drives adviser to offer service

An adviser frustrated at the high cost of AML audits has started up a business offering her own.

Thursday, September 4th 2014, 6:00AM

by Susan Edmunds

Under the new AML legislation, reporting entities are required to have their risk assessment and AML processes audited every two years, or whenever the FMA requests it.

This has to be done by an independent and suitably qualified person.

Since the legislation was introduced, a number of businesses have opened their doors, offering their services as AML auditors.

AFA Meredith Cornelius, who owns Financial Strategies Nelson, was given quotes of up to $6000 for a single audit. “I thought ‘that is insane’.”

She decided to undertake training to be awarded CAMS certification by the Association of Certified Anti-Money Laundering Specialists. That qualification, combined with her experience as an adviser would enable her to conduct audits.

She is hoping to provide services to small advice firms who do not want to spend money on expensive audits.

“Having been involved with the IFA and SiFA, I know there are a lot of adviser businesses smaller than mine. Some have very few investment clients… most of us are very low-risk.”

She said it was important to tick of AML compliance but there was a lot of overkill, and some providers seemed to be taking advantage.

“If people say it’s a quick way to make money and charge $2500 for an audit, that’s rude. I’m not trying to make money.”

She will charge $700 plus GST to cover costs – a similar amount to ABC Compliance – and conduct Skype calls when necessary. “I’m targeting people like myself, not big firms.”

Advisers should band together to meet their compliance requirements, she said. “There’s no competitive advantage for any retail advisers in how good their compliance is. Let’s not make it an area we’re competing in. The competitive advantage should be how good the advice is. We’ve got to come together to share compliance costs and intellectual property. Why would you spend $1500, unless you have a misguided idea that it makes you a better adviser? It doesn’t. This is just about not having crooks run their money through your business.”

She said a pragmatic approach to the legislation would pay off. Advisers would benefit from dealing with someone who had first-hand experience of the industry.

“I know what you do for a living, I am one of you. Let’s get on and do this.”

« 800 AML returns sent to FMAIFA working on pro-bono offering »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

© Copyright 1997-2020 Tarawera Publishing Ltd. All Rights Reserved