The Australian Securities and Investments Commission (ASIC) has outlined its regulatory approach on the key questions of best interests and scaled advice, including the "safe harbour" elements.
In doing so, the regulator has made clear that the best interests test also captures on-line financial advice mechanisms by stating that personal advice covers "financial product advice given or directed to a person (including by electronic means) in circumstances where:
- the person giving the advice has considered one or more of the client's objectives, financial situation and needs; or
- a reasonable person might expect the person giving the advice to have considered one or more of these matters.
On the question of "safe harbour", the ASIC guide states that advice providers need to prove they "have complied with the best interests duty".
"If an advice provider shows they have taken the steps [with respect to the best interest duty, they have met their obligation to act in the best interests of their client," it said.
The ASIC documentation also makes it clear that the best interest provisions also apply to the provision of scaled advice but the regulator has recommended an option more reliant on ASIC guidance.
