The Australian Securities and Investments Commission has accepted "enforceable undertakings" (a form of settlement between an Australian regulator and an alleged offender) from two Queensland financial advisors.

Reid Menkens is a former representative of Millennium3 Financial Services Pty Ltd and AMP Financial Planning Pty Ltd and Leo Menkens is a former AMP representative. The pair trade as Menkens Financial Group in Brisbane.

An ASIC review of client files found failures by both father and son to:

• show that they had acted in the best interests of their clients;
• keep proper records; and
• provide statements of advice quickly enough.

According to what they have just signed, the pair must appoint an independent consultant to undertake a programme of pre-vet and audit reviews to test the compliance of the advice they have been preparing. The consultant will report to ASIC and the Menkens’ current financial services licensee and the pair will be required to remedy any deficiencies that come to light.

The agreement is part of the regulator's "wealth management project" which targets the four largest banks in Australia which are, in order of size:

• Commonwealth Bank (government owned until 1996);
• Westpac;
• Australia and New Zealand Banking Group (ANZ); and
• National Australia Bank (NAB).

The project is especially concerned with the "charging of advice fees without providing advice." The term 'advice' means personal advice (about financial products directed to a person) and is defined in detail in s766B Corporations Act 2001. Broadly speaking, financial product advice in this law is a recommendation or a statement of opinion, or a report of one of those things, that is intended to influence someone to make a decision about a financial product or could reasonably be regarded as being intended to have such an influence.

EU is an undertaking that a person will, to comply with the laws, regulations or the rules that the regulator in question administers:

• take specified action;
• refrain from taking specified action; and/or
• take specified action towards not contravening or being likely to contravene those laws, regulations or rules in future.

AUSTRAC, the Australian Transaction Reports and Analysis Centre which serves as the country's financial intelligence unit, also makes use of EUs from time to time, the last occasion being last year with Custom House Currency Exchange. The firm typically undertakes to pay the costs of compliance. It is not required to provide the regulator with any document that is the subject of legal professional privilege.