ASIC signals that admin assistance to clients is not actually advice
The Australian Securities and Investments Commission (ASIC) has stopped well short of confirming that the provision of administrative assistance to financial planning clients can actually be deemed the provision of advice.
Asked specifically whether ASIC’s definition of advice included “the provision of ongoing administration assistance, and not just the provision of an annual Review document”, ASIC’s response to a Parliamentary Committee was highly equivocal.
The response, provided Parliamentary Joint Committee on Corporations and Financial Services, was made just weeks ahead of the Minister for Superannuation, Financial Services and the Digital Economy, Senator Jane Hume, specifically urging financial advisers to provide their feedback to ASIC as part of its affordable project.
However, ASIC made clear to Queensland Liberal backbencher, Bert Van Mannen, that the provision of administrative assistance could not be specifically referenced and charged out in the same terms as the provision of financial advice.
ASIC outlined what the relevant legislation currently says and suggested that the provision of ongoing administration assistance might fall short of those requirements.
“Financial product advice is defined in s766B of the Corporations Act 2001 (the Act) as a recommendation or a statement of opinion, or a report of either of those things, that:
(a) is intended to influence a person or persons in making a decision in relation to a particular financial product or class of financial products, or an interest in a particular financial product or class of financial products; or
(b) could reasonably be regarded as being intended to have such an influence.”
“Whether or not the provision of ongoing administration assistance meets the legal definition of advice turns on what those services involve,” ASIC told Van Mannen. “However, if the services provided do not meet the above definition, for example, assisting a client update or change their contact details with product issuers for the investments they hold, those services would not be considered financial product advice.”
Recommended for you
Money Management examines the share price of financial advice licensees over one year to 31 March, with M&A actions in the final quarter having a positive effect for two licensees.
A $3.5 million settlement for victims of Melissa Caddick has been approved by the Federal Court following an initial agreement last December.
The Reserve Bank of Australia has delivered its first rate decision since the introduction of a new board structure last month.
Digital advice provider Otivo has launched an interactive tool, powered by artificial intelligence and Otivo’s own advice engine, to help answer client questions.
