AUSTRAC Risk Assessment of Financial Planning Industry
21 December 2016
Australia’s first risk assessment of money laundering and terrorism financing within the financial planning industry has found a “medium” level risk across the sector.
This is the second risk assessment of key financial sectors by the Federal Government’s financial intelligence agency AUSTRAC, following a report on the superannuation sector.
Australia’s financial planning industry raised $4.6 billion in revenue in 2016 and is accessed by one in five Australians, so it’s crucial that we work together with industry to protect it from criminal abuse.
AUSTRAC worked in close consultation with financial service providers, industry associations, experts and government agencies to identify key risks faced by the sector.
It found the financial planning sector is exposed to, and attracts, a moderate level of exploitation by criminal entities, with minor consequences as a result of the criminal activity.
The assessment found cyber-enabled fraud was the most reported offence, with financial planners indicating the threat from cyber criminals is growing in scale and sophistication.
Other fraud-related offences included scams, the use of false documents, as well as suspected cases of fraud conducted by financial planners. Only a small number of suspicious matters reported related to tax evasion and welfare fraud.
There were very few instances of suspected terrorism financing reported in the sector, but financial planners are encouraged to remain vigilant to the threat.
Importantly, this assessment will ensure financial planners have a greater awareness of the criminal risks facing their sector. With increased awareness comes increased reporting, which will result in greater intelligence to help crack down on financial crime.
AUSTRAC CEO Paul Jevtovic said it was very important that the industry could detect, understand and disrupt criminal threats targeting the sector.
“That’s why this type of industry partnership has become an important feature of the agency’s work and is essential in the fight against financial crime,” Mr Jevtovic said.
Financial Planning Association of Australia CEO Dante De Gori said the report would act as an easy reference tool for the industry.
“It has simplified a complex area of regulation, making it easy for financial planners to understand and apply,” Mr De Gori said.
“I commend AUSTRAC on their efforts to engage with the sector in developing this report.”
The full report is available on the AUSTRAC website.