The Australian Securities and Investments Commission (ASIC) has released guidance for advisers when giving records of advice (ROAs) provided under the temporary COVID-19 relief measure, which it consulted on with the Financial Adviser Standards and Ethics Authority (FASEA).
Under the relief measure, advisers could provide an ROA instead of a statement of advice (SOA) to existing clients that required financial advice due to the impact of the pandemic, which was extended in April.
“We welcome FASEA’s confirmation that the ROA example is consistent with advisers’ obligations under the Code of Ethics,” ASIC said.
“The example ROA is just an example and confined to the particular facts in the scenario and the requirements under the Corporations Act 2001.
“Australian financial services (AFS) licensees and their authorised representatives should consider their clients’ relevant circumstances when preparing and tailoring their ROA appropriately for clients, as well as any other legal obligations.
“All references to sections or regulations in the annotations to the example ROA are references to sections in the Corporations Act or regulations in the Corporations Regulations 2001 as inserted by the COVID-19 instrument.
“References to paragraphs in ‘RG 175 are references to Regulatory Guide 175 Licensing: Financial product advisers—Conduct and disclosure’ (RG 175).”
The guidance for ROAs included:
- The providing entity or an associated providing entity must have previously given the client an SOA that sets out the client’s relevant personal circumstances in relation to the previous advice;
- The providing entity must reasonably consider that the advice is required because of the adverse economic effects of COVID-19;
- AFS licensees and authorised representatives must keep records of the personal advice given to clients;
- The ROA must set out a brief explanation of changes in the client’s relevant personal circumstances in relation to the COVID-19 advice;
- The ROA must include brief particulars of the recommendations and the basis of the recommendations;
- The COVID-19 advice must be in relation to a class of financial products to which the previous advice related;
- A reasonable investigation conducted under s961B(2)(e) does not require an investigation into every product available;
- The ROA must set out brief particulars of the information or the statement that would be required by s947D(2) and 947D(3) if an SOA were given to the client;
- When giving the COVID-19 advice, the providing entity must disclose any actual or potential conflicts of interest, commissions and remuneration that might influence the providing entity in giving the advice and, if applicable, any replacement financial product disclosures; and
- A copy of the ROA must be given to the client at the applicable time.
