AUSTRAC launches financial crime red flags guide for financial planners
Australia's financial intelligence agency, AUSTRAC, has developed a new tool for financial planners to help fight serious financial crime including terrorism financing.
Financial crime red flags – a guide for financial planners is now available as a poster that aims to give financial planners an easily accessible tool to remind them of risks in their sector. It reiterates the messages of AUSTRAC's report Australia’s financial planning sector: money laundering and terrorism financing risk assessment released in December 2016.
“Financial planners are well placed to detect possible criminal activity by customers, and are required to report suspicious matters to AUSTRAC under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006. The new poster provides a selection of red flag indicators that financial planners can look out for,” said AUSTRAC CEO, Paul Jevtovic.
One of the key findings in AUSTRAC's risk assessment report was that criminal offences can occur at any stage of the cycle in which a customer engages a financial planner.
"The risk assessment tool will help the financial advice industry understand the full range of financial crime risks in their industry", said Peter Kell, ASIC's Deputy Chair.
Such crime risks include money laundering, tax evasion, fraud, terrorism financing, cyber-related fraud, and welfare fraud. Financial planners should look out for these red flags when:
- establishing the client-planner relationship
- collecting, analysing and evaluating client information
- providing financial advice to the customer
- arranging products
- reviewing or making variations to a portfolio
Industry has also shown support for the risk assessment and the red flags poster.
CEO of the Financial Planning Association of Australia, Dante de Gori, said “The recent AUSTRAC report has served as an important reminder to financial planners of the AML/CTF risks they face in their businesses. This new guide provides a useful and easy reference tool for planners to keep on hand and is a welcomed development by AUSTRAC”.
Mr Jevtovic added that the red flags poster, which will be promoted to financial planners, provides an opportunity to send a message to industry and remind them about the full risk assessment report.
"I encourage financial planners to use this poster and the risk assessment to evaluate and improve their AML/CTF systems and controls, to better protect and strengthen the sector against criminal activity", Mr Jevtovic said.
The poster and risk assessment are available on the AUSTRAC website.