The right side of the law
What an adviser needs to do:
disclose conflicts of interest;
disclose adviser remuneration;
disclose any limitation that may affect recommendations;
disclose the costs associated with switching, or any other recommendations;
disclose loss of benefits (temporarily or otherwise) and other significant consequences of taking the recommended action;
compare and advise on the features of a person’s existing fund as compared with the recommended fund;
decide whether the recommendation to change funds is appropriate for the client and not misleading; and
if recommending a self-managed superannuation fund (SMSF), advise the client of significant responsibilities as a trustee, or ensure they seek advice on those responsibilities.
What a licence holder should consider:
the monitoring and supervision of representatives;
churning and mis-selling practices;
additional research — such as providing information on industry funds;
education and training of representatives;
reviewing retail disclosure requirements;
risk management systems;
professional indemnity insurance;
self-managed superannuation fund (SMSF) advice capacity; and
industry codes and rules (for example, FPA Rule of Professional Conduct 118).
Source: The Argyle Partnership
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