Privacy Commission weighs into client ownership debate
The Federal Privacy Commissioner has released a draft ruling allowing departing dealer group advisers to take clients with them - an issue that appeared to contravene the Privacy Act 2000 - and will be requesting feedback from relevant industry bodies on the ruling.
The clarification stemmed fromAXAand the Authorised Representatives Association (ARA) - representing the interests of 650 AXA advisers - having approached the Privacy Commission in May over fears the Act may prevent advisers from taking clients and client information with them upon leaving a dealer group.
“We argued that if you [the dealer] were to strip the client away from the adviser who just happened to be moving, and allocated them to another adviser, then this was more likely to compromise the client’s personal details rather than for the client to go with the person [adviser] they knew,” says Mark Halsey of Perth-based financial services law firm Halsey and Associates, which represented both AXA and the ARA in the matter.
The decision, which looks set to create an industry precedent for interpretation of Privacy Act provisions on the ownership and portability of client information, will extricate AXA from a catch-22 situation in which its contractual agreements had been in conflict with the group's legal interpretation of the Act.
“When we initially looked at the approach being taken, the thing that stood out was that under the Corporations Act the dealer is responsible for the provision of service to the client. In that sense the client is the client of the dealer… We approached the commission with the understanding that the Privacy Act legislates on a completely different basis, as the Privacy Commission is about protecting how many people and who knows about a person’s individual circumstances,” Halsey says.
“There is a lot of grey in the Privacy Act. The ruling however is not a binding precedent but will be posted on the Commission’s website under its ‘frequently asked questions’. However as it is responsible for the interpretation of the Act it will carry some weight.”
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