Advisers’ priority is on obtaining consent: AFA
Advisers cannot shy away from conflict in a client relationship if it is needed to secure consent for the advice, according to the Association of Financial Advisers (AFA).
At the AFA roadshow in Sydney, a panel was given a scenario where a client with a language barrier nodded to a decision rather than verbally consented and the conversation was handled by her English-speaking husband.
Standard 4 of the FASEA Code of Ethics stated that an adviser “may only act for a client with their free, prior and informed consent” while Standard 2 stated an adviser “must act with integrity and in the best interests of each of their clients”.
Phil Anderson, AFA chief executive, said: “A client needs to give consent, a nod is not consent especially if there is a language barrier. If one client is dominating and the other is subservient to them then you have to find a way to have genuine agreement and that might mean there is conflict.
“You can’t be too aggressive but have to be careful and put the priority on making sure you have genuine consent from the client, not prioritising the avoidance of conflict.
“If you can’t get that then to have to ask if you can continue to advise them if you aren’t acting in their best interest.”
Fellow panellist Matthew Gale, financial adviser at GJ Private Wealth, said that could mean bringing in an interpreter for ease of communication in order to ensure the client understood.
David Glen, national technical manager at TAL, added a scenario like that would make him wonder if one party had something to hide or was controlling the assets.
AUTHOR
Laura Dew
Recommended for you
High-net-worth advisers seeking to grow their businesses are likely to find alternatives to be a key part of the puzzle amid investor demand, according to Praemium’s head of private wealth.
The financial advice profession has lifted back above the 15,500 mark this week thanks to a double-digit net rise in adviser numbers, according to Wealth Data.
A closer watch on licensees that fall short on cyber security protections is among a dozen new enforcement priorities announced by the corporate regulator for 2025.
Research house Morningstar has welcomed a new director for manager research to cover Australian and New Zealand fund managers.
