Why are you vulnerable to ML/TF?

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Financial advisers in New Zealand are generally small and as a result are considered lacking in monetary and time resources for AML/CFT awareness. Financial advisers (particularly AFAs) regularly provide services to high-net-worth individuals transacting either on his/her own behalf or through trusts or other legal arrangements for complex products.

 

FMA has rated the financial advisers sector as overall medium-low risk in its 2017 Sector Risk Assessment.

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What are the ML/TF risks faced by financial advisers?

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The money laundering and terrorism financing risks commonly associated with financial advisers are:

• Dependency on one or several high-value customers

• Small entity size leading to lack of ML/TF awareness

• Commission-based remuneration

• Emergence of robo-advice allowing for anonymity

• Trusts and other legal arrangements and foreign PEPs.

 

Financial advisers need to undertake risk assessment to identify, access and mitigate ML/TF risks.

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What services are covered by the AML/CFT Act 2009?

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The following services provided by financial advisers are captured by the AML/CFT Act 2009:

• Giving advice or selling category 1 products, including shares, bonds, managed funds and KiwiSaver. 

 

If you provide any of these services in your ordinary course of business, you are required to comply with the AML/CFT Act 2009.

 

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What is a Risk Based Approach AML/CFT regime?

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The AML/CFT regime is focused around the risk based approach, which means your compliance programme needs to be based on the risk assessment and appropriate to your business environment. You should not hire any consulting firms that tell you they have templated solutions for you to comply with the AML/CFT Act as each risk assessment and compliance programme should be unique to your business and practice.

 

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How can Riskverse help?

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We offer solutions that are easy to understand so you are not confused with the complicated terms generally used by ‘experts’ in this field.

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The following solutions may assist you in understanding your obligations and complying with the AML/CFT Act:

• AML/CFT Training: We provide customised training based on your risk environment and offer easy to understand examples to help your staff understand what needs to be done.

• AML/CFT Consulting: We can work with you to undertake risk assessments and design compliance programme which are unique to your business. Each risk assessment and compliance programme that we help you draft will be specifically designed for you and will not be based on a template copied from another company, so we make sure it is appropriate to your environment.

• AML/CFT Independent Audit: Our specialised CAMS qualified experts will carry out independent audit under Section 59 of the AML/CFT Act and provide recommendations to help you evaluate compliance and enhance overall control environment.