The Australian Securities and Investments Commission (ASIC) has expressed concern over the number of licensees still taking a so-called ‘cookie-cutter' approach to advice, which could be detrimental to clients.
Addressing the Association of Financial Advisers (AFA) National Conference on the Gold Coast yesterday, ASIC Deputy Chairman Peter Kell said advisers will struggle to comply with the best interests duty where there is a simplistic, cookie-cutter advice being given.
"We understand that there is a challenge, there is a balance between providing cost-effective advice and making sure it's compliant and fitting in with a particular model and meeting the individual needs of the client," Kell said.
"We understand that that tension can arise, but what we are seeing too often is that the balance tips too far over towards a more cookie-cutter approach, which means that some people will end up with products or strategies that are fundamentally unsuitable for them."
The Deputy Chairman identified key areas that advice providers should be paying special attention to, such as doing their due diligence on third party service providers such as research houses and consultancies, properly monitoring and supervising authorised representatives and making sure the documentation is up to scratch.
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