Financial advisers should make at least two attempts to contact clients in order to ascertain their wishes in relation to personal information when transferring dealer groups.
A Frequently Asked Question (FAQ) document released by the Office of the Federal Privacy Commissioner on the privacy obligations of advisers says clients must have a clear choice over what is done with their information, in the event of a planner transferring dealer groups.
The FAQ does not prescribe that financial advisers should have the right to take their client information with them in every case, as this will depend on individual dealer group agreements with their advisers.
Federal Privacy Commissioner Malcolm Crompton says clients must be aware of how their information is held/transferred, with clients being made aware from the beginning of the relationship with a planner.
Crompton says the client should be aware either that personal information will stay with the original dealer group, or that it will be transferred when the financial adviser moves to a new firm.
“In the Office’s view, two attempts to contact all clients would demonstrate that a reasonable effort has been made to seek the client’s express views,” he says.
Crompton also says that where a client doesn’t indicate what they want done with their personal information, advice to them should spell out what will happen if they take no action.
The FAQ from the Privacy Commissioner is not a law or ruling but only guidance for the sector on the application of the National Privacy Principles in the Privacy Act.
The circulation of the FAQ was sparked whenAXAmet with the Privacy Commissioner after it legally interpreted that the Privacy Act meant it would have to hold client information when advisers moved on.
This legal interpretation would have put it in conflict with its contractual agreements with its advisers that allowed them to take their client information when leaving the dealer group.
