Three lessons for advisers from FADC case

Chapman Tripp partner Tim Williams says there are some key lessons in how to operate an advice business following the latest decision from the Financial Advisers Disciplinary Committee.

“The first lesson is that the world has changed. Now advisers need to be able to demonstrate compliance through records, rather than just comply. A lot of the cases have illustrated that people have been successfully prosecuted, whether or not they comply in other respects, but a failure to keep records is a liability in and of itself.

“The key message here is to recognise that you need to be keeping good records that demonstrate to the FMA that you are being compliant.”

After the importance of record keeping, Williams believes the second lesson that advisers can take from the recent FADC cases, is how important it is for advisers to have a knowledge of the law.