ASIC considers regulatory relief for limited advice ROAs
The Australian Securities and Investments Commission (ASIC) is actively considering providing regulatory relief so that financial advisers can provide records of advice (ROAs) with respect to limited advice.
The regulator’s intentions have been revealed to the Parliamentary Joint Committee on Corporations and Financial Services which has been told that ASIC is “considering possible relief to expand the situations where a ROA can be used, for example when providing limited advice or strategic advice”.
ASIC said it was considering the relief with respect to ROAs in circumstances where statements of advice (SOAs) had been identified by financial advisers as a significant barrier to the delivery of more affordable advice in the form of limited advice.
ASIC also noted the number of financial advisers who, as part of its affordable advice review consultation process, told the regulator it “should talk directly to advisers, not just licensees, professional associations and lobbyists”.
Under the heading “SOAs are a key cost barrier to providing limited advice”, the regulator said respondents to its consultation around affordable advice “have raised that Government should reconsider the SOA requirements and expand the situations when a ROA is permissible instead of an SOA”.
ASIC noted that it had consulted on ‘strategic advice’, which it had defined as advice that addresses a client’s needs and goals either:
- Without making a financial product recommendation to a client; or
- By only making a recommendation about a class of financial products.
It said that 128 respondents thought Australians would benefit from more strategic advice and that it was now considering how to address the following key issues that were raised:
- The boundary between product advice and strategic advice is uncertain: Based on this feedback, we will consider developing some examples, to show how compliant strategic advice can be given. The examples will also address when strategic advice becomes product advice; and
- Licensees restrict the provision of strategic-only advice: Adviser respondents say that their licensees restrict strategic-only advice and require advisers to go through the full advice process (including product suitability tests), even though a client only seeks strategic advice. We intend to explore this issue further in the roundtables.
Recommended for you
ASIC has cancelled the AFSL of an advice firm associated with Shield and First Guardian collapses, and permanently banned its responsible manager.
In the run-up to heavy losses expected at the end of the financial year, June has already reported consecutive weeks of adviser losses.
ASIC has banned a former NSW adviser from providing advice for 10 years for investing at least $14.8 million into a cryptocurrency-based scam.
ASIC has sent warning notices to social media finfluencers who it suspects are providing unlicensed financial advice to Australians as part of a global crackdown by international regulators.
