AustralianSecurities and Investments Commission (ASIC) director Pauline Vamos has warned a high number of advisers are beginning to complain that dealer groups are misusing the Privacy Act in an attempt to stop them taking their clients with them when they move to a new dealer group.
Vamos says that under the Privacy Act, a dealer group is obligated by law to protect the privacy of client information and therefore is well within its rights to refuse to allow exiting advisers to take client files with them when they leave.
However, Vamos says the Privacy Act itself does not stop exiting advisers from contacting clients.
Advisers may compile a list of clients from memory and contact those clients using information sourced from outside the dealer group.
“Client information may not have been collected in their time with the current dealer group — it may have been from a list they brought with them to the dealer group in the first place,” she says.
Advisers might also use publicly available information, such as telephone directories, to source the contact details of clients.
See page 13 for further discussion on the implications of the Privacy Act for advisers and dealers.
