ASIC’s relief measures surrounding the provision of Financial Services Guides (FSG) have been welcomed by the industry association.
The Financial Advice Association Australia (FAAA) expressed its support for the corporate regulator’s announcement regarding FSG requirements.
Namely, financial advisers can now rely on website disclosure information instead of providing an FSG when dealing in financial products as a result of providing financial advice.
Phil Anderson, general manager of policy, advocacy and standards at FAAA, explained that the changes provided greater clarity for the advice profession.
He said: “This relief resolves a problem that was identified in the law following the passing of the Delivering Better Financial Outcomes (DBFO) Bill, where the service of dealing was unintentionally not captured by this reform.
“Dealing, which includes implementing a product that has been recommended as part of the provision of financial advice, is a critical service provided to clients. This relief now provides certainty to enable financial advice businesses to rely upon the FSG reform in the DBFO Bill.”
He added that the FAAA has been working with ASIC on the issue since September when the problem was first identified.
“We are very pleased that ASIC has delivered a workable solution to the financial services industry.”
While recognising the temporary nature of ASIC’s relief, Anderson said the FAAA is committed to working alongside the federal government to pursue a permanent solution.
The ASIC Corporations (Amendment) Instrument 2024/809 amends the ASIC Corporations (Financial Services Guides) Instrument 2015/541 to address an unintended consequence of the Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Act 2024 (DBFO Act).
The amendment allows financial services licensees and authorised representatives to make website disclosure information available for dealing in financial products when implementing financial product advice, rather than providing a separate FSG.
However, Samantha Hills, partner at Holley Nethercote, recently explained that the FSG relief is “not all it was cracked up to be”.
A licensee or corporate authorised representative (CAR) can only take advantage of the new provisions when the financial service being provided is financial product advice (general or personal), she stated.
“For all other financial services, the pre-existing regime applies. Many advice licensees and their CARs engage in dealing (either through execution only services or following the provision of personal advice) and some provide other services, such as claims handling and settling in relation to insurance. These other services still require you to provide the FSG the normal way.
“Given that relief only applies to the provision of financial product advice and the pre-existing FSG requirements are not particularly demanding, the relief is likely not to be very popular. Many licensees and CARs will find it easier to stick with the existing requirements and their existing processes.”
