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Wednesday 1 December 2021

21-325MR ASIC releases guidance and examples on limited advice

ASIC has today released an information sheet on limited advice and an example statement of advice (SOA) to assist financial advisers and advice licensees comply with their obligations when providing limited personal advice to retail clients.

INFO 267: Tips for giving limited advice provides tips and summarises the relevant guidance from Regulatory Guide 175 Licensing: Financial product advisers-Conduct and disclosure (RG 175) and Regulatory Guide 244: Giving information, general advice and scaled advice (RG 244).

INFO 267 includes information on what advice providers can do to meet their obligations under the law, including the best interests duty and related obligations as well as the  Financial Adviser Standards and Ethics Authority (FASEA) Financial Planners and Advisers Code of Ethics (Code of Ethics) when giving limited advice.

ASIC Commissioner Danielle Press said, ‘ASIC recognises that many consumers prefer to seek limited and specific advice rather than comprehensive advice. We also understand that industry faces some barriers to providing limited advice, including a lack of clarity about the regulatory requirements.’

‘We expect this guidance will provide regulatory certainty to industry and help reduce compliance costs. It will assist financial advisers in their efforts to make these forms of advice more available to consumers and assist them in delivering quality advice in a timely, affordable, and compliant manner.’

The SOA example provided by ASIC is annotated to help advisers understand the relevant requirements under the Corporations Act 2001. This new guidance follows the recent release of ASIC’s guidance and example records of advice (21-294MR).

ASIC undertook targeted consultation with industry on INFO 267 and the example SOA. ASIC also consulted FASEA who confirmed that the SOA example is consistent with advisers’ obligations under the FASEA Financial Planners and Advisers Code of Ethics.

In developing INFO 267 and the example SOA, ASIC also considered the financial advice industry’s response to recent consultations, including Consultation Paper 332 Promoting access to affordable advice for consumers (CP 332). Responses to CP 332 indicated that industry would benefit from an updated example SOA that was shorter and more client-friendly.

‘Our Record of Advice and Statement of Advice information sheets provide the practical guidance requested by financial advisers during our latest round of consultations,’ said Ms Press.

Background

In November 2020, ASIC consulted with the financial advice industry and relevant stakeholders through CP 332 to understand the issues impacting the supply of good-quality and affordable personal advice as well as the practical steps that can be taken to improve consumers’ access to advice (20-285MR). For more information, see a summary of industry response.

Download

INFO 267: Tips for giving limited advice

Example Statement of Advice (SOA): Limited advice

INFO 266: FAQs: Records of Advice (ROAs)

Last updated: 01/12/2021 12:29