The Australian Securities and Investments Commission (ASIC) has issued an update to its ‘Regulatory Guide 175: Licensing financial product advisers – conduct and disclosure’ to reflect regulatory and legislative changes.
The regulatory guide also includes revisions to the Future of Financial Advice (FOFA) reforms.
The guide has made technical amendments to the FOFA reforms, since the previous version, as well as amendments to clarify financial advisers’ record-keeping obligations when giving personal advice, on which it consulted in late 2015.
It said authorised representatives must keep records of the advice given, including statements of advice, for a period of at least seven years from the day they gave advice unless they have given the records to their licensee.
The obligation would continue to apply even if the authorised representative moves licensees during the period the records are required to be given or kept.
The guide also makes clear that the best interests duty, the appropriate advice requirement, and the conflicts priority rule are separate obligations that operate alongside each other and every time personal advice was provided.
“RG 175 has also been updated to clarify that while the best interests duty and the appropriate advice requirement introduced as part of the FOFA reforms are separate obligations, it is unlikely that advice which fails to meet the best interests duty will be appropriate,” ASIC said.
It has also provided guidance on the use of restricted terms under the Corporations Act, particularly about when commissions can be said to be ‘rebated in full’.
“We are currently considering the interpretation of s923A, including in relation to whether other terms (such as ‘independently owned’) are restricted under s923A,” ASIC said.
“We will further update RG 175 to provide enhanced guidance on s923A in due course.”
