Powered by MOMENTUM MEDIA
moneymanagement logo
 
 

ASIC releases limited advice guidance

ASIC/financial-planning/financial-advice/limited-advice/

1 December 2021
| By Jassmyn |
image
image image
expand image

Financial advisers giving limited advice will need to explain what advice is provided and what is not provided to meet best interests duty, according to the corporate regulator.

The Australian Securities and Investments Commission (ASIC) has released an information sheet on limited advice an example statement of advice (SoA).

ASIC commissioner, Danielle Press, said the regulator understood the industry faced some barriers to providing limited advice, including a lack of clarity about the regulatory requirements.

“We expect this guidance will provide regulatory certainty to industry and help reduce compliance costs. It will assist financial advisers in their efforts to make these forms of advice more available to consumers and assist them in delivering quality advice in a timely, affordable, and compliant manner,” she said.

The information sheet said when giving limited advice, advisers needed to clearly communicate the advice they were providing and the advice they were not providing, along with the implications of this.

“For example, when giving limited advice, it should be very clear in your SoA (if you are required to give one) what advice you have provided and what advice you have not provided, the implications of this, and why you have taken this approach,” it said.

“We consider that limited advice will be unlikely to meet the best interests duty and related obligations if the client does not understand any of the significant limitations or qualifications that apply to it.

“Clear communication can help you to be satisfied that the client understands your advice, and the benefits, costs and risks of the financial products you recommend: see Standard 5 of the Code of Ethics.”

ASIC’s tips for providing limited advice included:

  • Identifying the client’s reasons for seeking advice by asking open-ended questions;
  • Putting your client first by declining to provide advice and referring your client elsewhere if you cannot act in the client's best interests when scoping the advice;
  • Addressing advice topics that fall outside the scope of the advice;
  • Making inquiries;
  • Revising the subject matter of advice;
  • Making inquiries to obtain complete and accurate information;
  • Using processes and systems for scoping advice;
  • Designing advice processes to ensure advice strategies come first; and
  • Keeping records.
Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

Significant ethical issues there. If a relationship is in the process of breaking down then both parties are likely to b...

2 weeks 6 days ago

It's not licensees not putting them on, it's small businesses (that are licensed) that cannot afford to put them on. The...

3 weeks 6 days ago

So we are now underwriting criminal scams?...

7 months ago

After last month’s surprise hold, the Reserve Bank of Australia has announced its latest interest rate decision....

3 weeks 1 day ago

WT Financial’s Keith Cullen is eager for its Hubco initiative to see advice firms under its licence trade at multiples which are catching up to those UK and US financial ...

3 weeks 4 days ago

While the profession continues to see consolidation at the top, Adviser Ratings has compared the business models of Insignia and Entireti and how they are shaping the pro...

6 days 20 hours ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND