AXA advisers set for client win
AXAis expected to receive a green light from the Federal Privacy Commissioner allowing it to honour the contractual agreements it has with its advisers, permitting them to take clients with them on leaving the group.
The decision, which could set an industry precedent for the interpretation of Privacy Act provisions on the ownership and portability of client information, will extricate AXA from a catch-22 situation in which it’s contractual agreements were in conflict with the group’s legal interpretation of the Privacy Act.
AXA initially lodged a submission with the Commissioner in May when it received legal advice that the Act may prevent advisers from taking their clients and client information upon leaving a dealer group unless they had the express written consent from the client.
The Authorised Representatives Association (ARA), representing the interests of 650 AXA advisers, received the same legal advice and worked jointly with AXA on the submission.
Under this interpretation, AXA would have had to send letters to clients advising them their planner wanted to leave, but would need for the return of each individual client’s consent before letting them go.
The Commissioner’s decision is expected to release the group from this legal interpretation, with the only condition being that the client has a choice in the transition with an adviser.
This will mean that the default will now fall to the adviser, with clients having to advise AXA of their express wish to stay with the dealer if they do want to stay.
The decision will have relevance for the wider financial planning industry, after the AXA interpretation of the Act meant those dealers who were simply letting clients leave with departing advisers may have been in contravention of the law.
Part of the reason for the expected success of the AXA and ARA submission is the two groups were not in conflict over the issue.
AUTHOR
Recommended for you
Wealth Data has examined which advice business model has seen the most growth since the start of the year including those that offer holistic advice.
Research conducted by Elixir Consulting and Lonsec has quantified the efficiency gains of using managed accounts in financial advice practices in hours per week saved.
With only one-quarter of advice practices actively seeking feedback from clients, the Financial Advice Association Australia has emphasised why this is a critical tool for client retention.
As the government announces a public inquiry into the collapse of Dixon Advisory, risk adviser Richard Silberman has detailed the three areas that typically lead to an AFSL's collapse.
