'Out of our control': Sanlam clients caught in ASIC licensing crossfire
The corporate regulator's action against Sanlam Private Wealth over its compliance practices has exposed the risks associated with "licence for hire" firms.
ASIC’s enforceable action against Sanlam Private Wealth, announced just before Christmas, has caught out the many wealth businesses on its books as the regulator looks to more closely scrutinise the risky licensing model.
Owned by the Johannesburg-listed Sanlam Group, the company was given 30 days to undertake an independent review and overhaul its compliance practices in order to convince the regulator it deserves to keep its Australian Financial Services Licence (AFSL) and continue operating.
It also puts Sanlam’s clients, which rely on its licence to service hundreds of thousands of Australian investors, in the crossfire.
“Sanlam must engage an ASIC-approved independent expert to review its systems and processes which we will follow closely,” said one founder and Sanlam client, who spoke on the condition of anonymity to protect their relationship.
