Accountability in financial services has evolved beyond entities and corporate licences. No longer can the ‘Milli Vanilli’ approach be relied upon, or blaming the newest member of staff (who also happened to be absent on the day in question). Regulators now target individual behaviour, holding advisers and principals personally responsible for conduct failures. This shift has serious ramifications for advisers, from professional discipline to criminal exposure.

Advisers, principals and responsible managers need to understand where personal exposure arises and how to respond to avoid regulatory sanction and client harm.

Individual Accountability

Historically, regulatory obligations primarily rested on the licensee entities. If an AFSL holder breached the law, the entity faced penalties. This rarely resulted in any individuals being reprimanded, aside from their bonus being reduced internally. Individual advisers could be (somewhat) insulated, in some cases, by the corporate wrapper. That is, unless they were ‘bad apples’, then the licensee took a step back and denied any involvement.

That paradigm is now shifting. Regulators are emphasising personal responsibility for conduct and compliance decisions. Not only at the adviser level, but also higher up the chain.  

Individual accountability features in:

• Registrations and licensing: It is mandatory to be both authorised by a licensee and registered on the Financial Advisers Register to give personal advice. Failure to do this can expose the adviser and the authorising principal to enforcement action.
• Professional standards: Individuals must meet education and training standards and the “fit and proper” tests; they can’t just rely on a licensee.
• Accountability regimes for senior personnel: FAR extends accountability obligations to directors and senior executives at institutions regulated by APRA and ASIC. They require clear, documented responsibilities and individuals are exposed to civil sanctions as part of this.

This trend reflects broader global regulatory reform. Regulators want to see named individuals accountable for outcomes, not just entities.

Where Personal Exposure Arises: Misconduct and Unsuitability of Advice

ASIC continues to ban advisers whose conduct fails core obligations. We’ve all seen the bannings and ASIC actions associated with Shield, but it doesn’t take a well-known and widespread story such as this to result in significant action from ASIC.

I’m assuming the majority of us stay abreast with ASIC Media Releases and would be well aware of any action ASIC take against advisers.

Just in case, and to highlight a couple of examples, I have compiled a list of significant bannings for your reading pleasure.

In late 2025, former adviser Anthony Joseph Del Vecchio was jailed and permanently banned for defrauding clients and misappropriating millions of dollars. This illustrates the extreme end where personal criminal liability arises.

In another case, Andrew Rankin was banned until 2029 for giving advice that was not in his clients’ best interests, and was linked to high‑risk investments in collapsed funds.

In addition to this, we’re also seeing bannings occur for:

• Fees for no service – 25-126MR ASIC bans former Crown Wealth Group director Andrew Moore for failing to report fees for no service | ASIC and
• Failing to supervise a provisional adviser – 25-152MR ASIC bans Ian Potter of Superannuation Advice Australia for 5 years for failure to supervise provisional relevant provider | ASIC

These are not edge cases. ASIC’s enforcement summaries show multiple adviser bans, disqualifications and civil penalties for conduct vs. client interests.

Practical takeaways:

Advisers need to ensure advice is documented thoroughly. It needs to clearly demonstrate how recommendations meet the client’s objectives and risk profile and comply with best‑interest obligations in the Corporations Act.

When ongoing services are being provided, adherence to the contract is vital, as well as relevant duties and obligations. Advisers simply cannot receive fees if no services are being provided. Regarding the supervision of provisional advisers, the requirements are clear and must be followed. If you have concerns about capacity or about documenting the approach and process at the business/licensee level, get in contact with us. We can help.

Principal and Responsible Manager Exposure

Licence holders and principals also face exposure for failing to properly oversee and control their advisers. ASIC focuses its enforcement on licensees that authorise unregistered advisers or fail to ensure compliance frameworks prevent misconduct.

We all know that being a responsible manager is 99% fun, and being treated like a rockstar isn’t always bad, but the reality is that it does have some drawbacks. Licensees and Responsible Managers are tasked with maintaining robust governance, supervision and monitoring. Poor oversight contributes to failures that attract enforcement.

For example, in November last year, five advisers were brought before the FSCP for failing to comply with CPD requirements.

If this occurs on any Responsible Manager’s watch, questions will be asked, and it’s best to avoid any scrutiny.

Practical Takeaway

Principals and responsible managers need to implement (and retain evidence) that effective supervision and revision of adviser performance was conducted. This aligns with the general obligations of an AFSL (RG104) and CPD falls under the training and competency section of this Regulatory Guide.

This can either be done internally, or you can engage us to assist through training and workshops. We can provide specific training tailored to the licensee’s needs (and allocate CPD points). We can also provide training and deliver the information provided by the relevant CPD training provider.

Institutional Accountability Outside Advice

Where senior executives take on governance functions, the Financial Accountability Regime (FAR) now demands documented accountability and exposes individuals (including directors) to civil penalties and potential disqualification for failing to meet their obligations. This applies even if this person does not provide any advice. Let that sink in for a moment…

Accountability statements and accountability maps must clearly outline the individual’s responsibilities and actions to meet them. This includes COEs, CFOs, CROs, Heads of Compliance or Advice, under super funds, banks, and insurers.

Key obligations:

• Clear allocation of responsibility for core functions.
• Duty to take reasonable steps to ensure that part of the business complies with relevant laws and to avoid harm to consumers.
• Documentation of responsibilities in accountability statements, supported by an accountability map across the entity.

Practical Takeaways

Advisers and non-advisers in senior or principal roles should seek legal and compliance support to ensure their documented responsibilities and actions align with regulatory expectations under FAR.

• Document core responsibilities and maintain evidence of adherence, reasonable steps and engage actively with compliance. If there is a failure, such as an unregistered adviser providing advice, a complaint goes unresolved, or an adviser does not meet ethical or best interest duties, questions will be asked.
• These may be related to knowledge of the adviser’s behaviour, and what steps were taken to prevent said misconduct, and could result in civil penalties or disqualifications (among other things, at a business level).
• Identify roles and entity types. Document these through an accountability statement, maintaining evidence of reasonable steps and engage actively with compliance and risk functions, both internally and externally.
• Grasp the specifics of personal liability (s912A and s961B) and get legal and compliance advice when drafting accountability documentation.

Just like the advice itself, vague, generic, and incomplete records and documents just won’t cut it.

Final Word

ASIC is shifting from education to visible enforcement. They report doubling their investigation activity and court filings in recent years, and a suite of new enforcement priorities for 2026. These include consumer harm, misleading practices, and financial reporting misconduct. All areas that can involve adviser conduct and non-advising executives.

ASIC publishes annual enforcement outcomes showing individuals prosecuted and banned across a range of misconduct types. Keeping abreast of these provides a good indication of what is happening in the advice world and what ASIC is up to. They also emphasise cooperation and early remediation as part of enforcement decisions, but will escalate serious breaches to the courts or impose civil penalties.

How Advisers Should Respond

To manage this shift, we’d suggest that advisers:

• Verify registration and authorisations
  • Check that authorisations and registers are up to date before providing advice. Keep records of checks, as errors can also trigger enforcement.
• Embed best‑interest and compliance controls
  • Document advice rationales in recommendations clearly.
  • Use compliance checklists (as a supplementary tool) and frequently review.
• Document supervision protocols and adviser reviews
  • Hold regular documented reviews of advice output, complaints and training.
  • Demonstrate swift corrective action where gaps arise.
• Maintain Professional Development
  • Keep qualifications and continuing professional development up to date. Non‑compliance with standards can attract regulatory scrutiny.
• Understand Personal Remuneration Exposure
  • Under FAR and other regimes, variable remuneration may be deferred and tied to accountability.
  • Understand how remuneration impacts personal compliance obligations.
• Leverage Compliance and Legal Advice
  • Regular sessions with compliance experts can uncover weak spots before regulators do.
  • Engage external non-aligned assistance for an independent view and assessment.

For help responding to these changes, get in contact with our team today.

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