TIP: If you're giving advice, then you can help protect yourself by following ASIC's suggestions that advisers:
ASIC says the test for whether an adviser has given an adequate warning is whether the adviser has conveyed the substance of the Act in a way that is likely to be understood by the client.
See ASIC release QFS 157.
ASIC has stated that even if an adviser has information about a client's personal circumstances, then the adviser can still give advice to that client that will be considered 'general advice'.
ASIC's test for whether the Adviser has provided 'personal' financial product advice is whether:
Essentially, the important question is not whether the adviser possesses any personal information about the client, but whether the adviser took that information into account in providing their advice.
This of course raises the question - how would anyone ever know?
ASIC's starting position is that they will treat financial product advice as 'general' advice, unless the facts suggest otherwise. To determine this, ASIC will look to see if there was conduct suggesting:
ASIC has outlined several examples of activities which it is unlikely to regard as 'personal advice'. These include:
Of course, in these situations, a general advice warning should be provided and advisers should be careful to consider the specific circumstances of the situation.
TIP: When conducting mail-outs or hosting seminars, establish sound guidelines early on and stick to them.
See ASIC release QFS 158.
Julian Smith is a partner in the Maddocks Commercial team.
Julian advises extensively in the following areas:
Julian advises clients ranging from public companies servicing the wholesale financial services market to high net worth individuals and their advisers.
Julian has been with Maddocks since undertaking articles in 2001.
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For more information, contact Maddocks on (03) 9258 3555 and ask to speak to a member of their team.