Acting in the clientʼs best interests
When providing personal advice to retail clients, you must prioritise the clientʼs interests.
Retail clients who rely on personal advice may suffer significant loss if the advice is conflicted or is not of good quality.
The best interests duty and related obligations are designed to ensure that retail clients receive advice that meets their objectives, financial situation and needs, and that you act in the best interests of your clients when providing advice.
Regulatory Guide 175 Licensing: Financial product advisers (RG 175) contains guidance about:
- how the best interests duty applies to personal advice (both comprehensive and scaled advice)
- features of good quality advice
- the ‘safe harbour’ provisions defining how to comply with the best interests duty
- the modified best interests duty and when it applies
- use of processes to provide advice
- how to recognise a possible conflict of interest
- the conflicts priority rule and how it applies to products or services provided by a related party.
- RG 175 Licensing: Financial product advisers
- Regulatory index – Financial services disclosure