Financial planners and other financial services providers who sell products over the phone or in other ‘time critical’ situations have had their compliance burden reduced after the corporate regulator announced it would ease the requirements associated with providing a Financial Services Guide (FSG).
The Financial Services Reform Act (FSRA) requires advisers who are unable to give clients an FSG at the time a financial service is provided to send out the document to the client within five days.
However, the FSRA also states that an FSG has to be up to date at the time it is given to a client, meaning advisers could have been in breach of the Act if there had been changes to the product they were selling between the time they spoke to the client and the time the FSG reached the client.
The new class order, issued by the Australian Securities and Investments Commission (ASIC) today, means an FSG sent out to a client only has be up to date as at the time the advice was given to the client over the phone or in other ‘time critical’ situations.
ASIC director of legal and technical operations John Price says the move will ease the compliance burden on the financial services industry, without impacting on the protections put in place for consumers under the FSRA.
“The class order will in no way reduce the level of information provided to retail clients to help them decide whether to acquire a financial service,” Price says.
“The time critical provisions of the Act may mean that FSGs need to contain tailored information that is known after the financial service is provided. The class order means that an FSG given after the provision of a financial service in a time critical case is the same as an FSG that is given before the provision of a financial service in normal cases.”
