ASIC targets misuse of ‘general advice’
Australian Financial Services license (AFSL) holders who misuse the provision of general advice to retail clients will find themselves being scrutinised by the Australian Securities and Investments Commission (ASIC).
The regulator has signalled its intention in its latest Enforcement Outcome Review report where it listed the misuse of general advice as an issue to which it would be paying particular attention over the next six months.
ASIC specifically cited “instances where AFS licensees claim to provide general advice to retail clients during the sale of financial products (and therefore do not need to comply with the best interests duty and related obligations), but are actually providing personal advice”.
Importantly, ASIC said it would also be paying particular attention to financial adviser compliance with the best interests duty and “their obligation to provide appropriate advice to clients.”
ASIC also signalled that it would be continuing the activity which gave rise to its so-called “fee for no service” report, stating that it would examining any failure by AFSLs to deliver ongoing advice services to financial advice customers who are paying fees to receive those services.
Recommended for you
A financial advice firm has seen a weekly decline of 10 advisers, with all moving to a new licensee, while Centrepoint Alliance continues its “growth story”.
Sequoia Financial Group has seen a top-level reshuffle as the chair of the board, John Larsen, steps down after five years in the position.
As statements of advice move into the rear-view mirror, Vital Business Partners explores how financial advisers are adopting innovative documentation strategies.
Adviser Ratings has explored whether there is a financial benefit to advice firms seeking to have a specialised client base in terms of client assets and fees charged.