General advice exemption a scaled advice opportunity
The removal of the conflicted rem ban for general advice in the proposed FOFA changes may provide new opportunities for planners who want to provide scaled advice, according to The Fold Legal.
Advisers have the opportunity to offer general advice to clients who want to make their own investment decisions or who don’t want to pay for a full advisory service, The Fold Legal managing director Claire Wivell Plater said.
“This would allow financial advice businesses to introduce a general advice model for this type of client,” Ms Wivell Plater said.
“If the business then arranges for the client to acquire the financial product, they can be remunerated by commission for the services.”
However, she warned that in full-service and ongoing advice relationships where a financial adviser has undertaken a detailed needs analysis and the client expects and pays for the adviser to recommend strategies and investments that will achieve their personal goals, advice will be personal.
“Businesses that want to provide general advice need to have a detailed understanding of when advice is considered general and when it is considered personal,” she said.
“In the early days of the AFS regime, there was some uncertainty over where to draw the line.
“But we’re pretty clear about it now – and we’ve got pretty good at developing sales process and training that ensure the adviser stays on the general side of the advice spectrum.”
ASIC relieves AFSLs from compliance scheme
The corporate regulator has assured advice licensees that they won’t be breach...
MLC sees silver lining in Hayne recommendations
The wealth giant has acknowledged the significant challenges facing the financia...
FASEA standard blasted as ‘reckless’, ‘ill-considered’
A change from the Financial Adviser Standards and Ethics Authority to its code o...