One of the major issues in all this is the terminology applied.By using the term "BEST" interest it opens up any assessment of any advice provided to a subjective and variable analysis of exactly what constitutes "BEST".Best (adjective)...."of the most excellent or desirable quality".The interpretation of this word and the assessment of whether the advice provided is of the "most excellent" is entirely subjective.The requirement to provide advice is to very carefully analyse the client's position , needs and objectives and following research and analysis to present appropriate strategy and recommendations that will satisfy the identified needs and objectives.What is best for one client may not well be best for another, even though their needs and objectives may be very similar. Quite obviously, it is most important the advice provided is very individualised on every occasion.However, by insisting the advice provided should be "best" interest, also implies the advice should be "best" advice.Taking the definition into consideration would mean the advice should also be the most excellent, rather than being excellent or high quality that satisfies the clients objectives.The use of the word " best " leaves the attack on the provision of advice fully open at every level because it may well be next to impossible to deliver the most excellent or best advice in the very fast paced and changing world of financial services and financial products.The BID definition should have always been the CID (Client's Interest Duty), where the adviser was obligated to always having to act in the client's interest. This definition would have achieved the same outcome as the adviser must always be obligated to act in the client's interest, rather than their own.The problem of inserting the word " best ' simply allows no boundaries as to exactly what constitutes the subjective definition of this term and exposes advisers to endless justification as to whether the advice provided was best or nearly best, even though the client objectives and needs were clearly met and satisfied.
In order to give you the best site experience, we need to know what kind of investor you are. Please select the title that best describes you below.
Financial Advisers - Investment
Financial Advisers - SMSFs
Individual Investors with SMSFs
Financial Advisers - Insurance
Accountants and Solicitors
Financial Services Professional