Neo in Asic undertaking

The Australian Securities and Investments Commission has agreed to an enforceable undertaking with local financial planner Neo Financial Solutions, after surveillance of the business raised concerns about risk management and compliance frameworks.

It follows a six-month review of Neo’s business by Asic, completed in February of this year.

Some of the watchdog’s concerns including a lack of resources devoted to internal compliance, inadequate risk assessment, untimely audit programs and inconsistent vetting procedures.

As part of the agreement, Neo will hire an independent expert to review its risk management and compliance framework.

The company has about 160 authorised representatives, according to Asic.

Asic deputy chairman Peter Kell said inadequate risk management and compliance frameworks, combined with deficient application of systems and controls could result in the provision of advice that did not serve the best interests of clients.

“ASIC is committed to raising standards across the financial services industry,” he said.

“We expect licensees to dedicate sufficient resources to appropriately monitor and supervise high risk and newly appointed authorised representatives and to remedy poor advice in a timely manner.”

A spokesperson for Neo said the company had co-operated fully and would work proactively with the independent expert to assist in the determination and remediation of ASIC's concerns.