ASIC signals that admin assistance to clients is not actually advice
The Australian Securities and Investments Commission (ASIC) has stopped well short of confirming that the provision of administrative assistance to financial planning clients can actually be deemed the provision of advice.
Asked specifically whether ASIC’s definition of advice included “the provision of ongoing administration assistance, and not just the provision of an annual Review document”, ASIC’s response to a Parliamentary Committee was highly equivocal.
The response, provided Parliamentary Joint Committee on Corporations and Financial Services, was made just weeks ahead of the Minister for Superannuation, Financial Services and the Digital Economy, Senator Jane Hume, specifically urging financial advisers to provide their feedback to ASIC as part of its affordable project.
However, ASIC made clear to Queensland Liberal backbencher, Bert Van Mannen, that the provision of administrative assistance could not be specifically referenced and charged out in the same terms as the provision of financial advice.
ASIC outlined what the relevant legislation currently says and suggested that the provision of ongoing administration assistance might fall short of those requirements.
“Financial product advice is defined in s766B of the Corporations Act 2001 (the Act) as a recommendation or a statement of opinion, or a report of either of those things, that:
(a) is intended to influence a person or persons in making a decision in relation to a particular financial product or class of financial products, or an interest in a particular financial product or class of financial products; or
(b) could reasonably be regarded as being intended to have such an influence.”
“Whether or not the provision of ongoing administration assistance meets the legal definition of advice turns on what those services involve,” ASIC told Van Mannen. “However, if the services provided do not meet the above definition, for example, assisting a client update or change their contact details with product issuers for the investments they hold, those services would not be considered financial product advice.”
Recommended for you
ASIC has launched court proceedings against the responsible entity of three managed investment schemes with around 600 retail investors.
There is a gap in the market for Australian advisers to help individuals with succession planning as the country has been noted by Capital Group for being overly “hands off” around inheritances.
ASIC has cancelled the AFSL of an advice firm associated with Shield and First Guardian collapses, and permanently banned its responsible manager.
Having peaked at more than 40 per cent growth since the first M&A bid, Insignia Financial shares have returned to earth six months later as the company awaits a final decision from CC Capital.
