Author: Lorraine Calway, Gold Seal Audit & Technical Services Manager
Should insurance brokers describe themselves as a limited licensee when completing the ASIC form FS70?
Gold Seal”s compliance helpline has recently received several queries where:
- the brokerage’s financial auditor provided incorrect advice about the completion of FS70; and
- other brokerages who have completed FS70 incorrectly, and whose auditors have also completed FS71 incorrectly.
As most brokerages will be submitting their forms to ASIC the week of 22nd October, we wanted to make you aware of this.
Question 3 of FS70 asks AFS licensees to “Check which of the following describes you during the year, that these accounts are for, and the documents you are required to attach to this form.” Insurance brokerages:
- are not limited AFS licensees and should select the first option “I am a ….. financial services licensee that is not a limited licensee”; and
- also need to ensure that their financial auditors do not state in FS71 that the form has been prepared on the basis that the licensee was a limited licensee.
What are limited licenses?
- Limited licenses were introduced for use by accountants. However persons other than accountants can apply for a limited licence.
- A limited licensee is authorised to provide financial product advice about Self-Managed Superannuation Funds (SMSFs); or a client’s existing superannuation holdings in certain circumstances.
- They can also provide ‘class of product advice’ about a limited range of financial products, which includes general insurance products.
- Class of product advice is financial product advice about a class of products, but does not include a recommendation about a specific product in the class.
- A limited AFS licensee can also be authorised to arrange to deal in an interest in a SMSF.
For further assistance, contact the compliance helpline on 03 9510 5100