ASIC releases guidance on best interests and scaled advice
The Australian Securities and Investments Commission (ASIC) has outlined its regulatory approach on the key questions of best interests and scaled advice, including the "safe harbour" elements.
In doing so, the regulator has made clear that the best interests test also captures on-line financial advice mechanisms by stating that personal advice covers "financial product advice given or directed to a person (including by electronic means) in circumstances where:
- the person giving the advice has considered one or more of the client's objectives, financial situation and needs; or
- a reasonable person might expect the person giving the advice to have considered one or more of these matters.
On the question of "safe harbour", the ASIC guide states that advice providers need to prove they "have complied with the best interests duty".
"If an advice provider shows they have taken the steps [with respect to the best interest duty, they have met their obligation to act in the best interests of their client," it said.
The ASIC documentation also makes it clear that the best interest provisions also apply to the provision of scaled advice but the regulator has recommended an option more reliant on ASIC guidance.
AUTHOR
Staff Writer
Recommended for you
Government has introduced a bill to Parliament to legislate the first stream of the QAR reforms.
ASIC now has a 1:1 ratio when it comes to court success in the enforcement of crypto activities and more action is expected as Treasury seeks to introduce a regulatory framework.
A leading governance body has hit out at “specialist interest groups proposing ad hoc law reform” when it comes to reforms of financial services legislation and believes an independent body is needed.
The release of ALRC’s final report into financial services legislation has highlighted financial advice as a “significant” focus as it seeks to reduce costs and help advisers understand their obligations, alongside the Quality of Advice Review.
