The Australian Securities and Investments Commission (ASIC) has been told that financial advisers want to be empowered to use their professional judgement but for too long have not been trusted to do so.
The Association of Financial Advisers (AFA) has noted that the ASIC affordable advice discussion paper has pointed to the ability of advisers to use their judgement to decide the scope and subject matter of the advice that a client is seeking, but said this needed to be more formally recognised.
“We appreciate the point made in paragraph 29 that ‘financial advisers can use their judgement to decide on the scope of the advice in a way that is consistent with a client’s relevant circumstances and the subject matter of the advice the client is seeking’,” the AFA said.
“Financial advisers want to be empowered to use their professional judgement, and we believe that they should be. Many of them are highly educated and well qualified. Many have years of experience.”
“It seems to us that for too long they have not been trusted to demonstrate professional judgement,” the AFA said.
“We strongly favour moving in a sensible transition towards increase reliance on professional judgement, as is permitted by other professions,” the AFA submission said but at the same time noted that “reliance on professional judgement does require greater certainty and consistency”.
“Principally, what is most important is for licensees and advisers to have confidence in their ability to use limited advice, and not to feel at risk that in doing so, they will be breaching their obligations.”