Scaled advice fits under best interests: ASIC
The regulator has confirmed scaled advice can be provided under best interests duties outlined in Future of Financial Advice changes.
Addressing a panel session on scaled and intra fund advice at the Financial Services Council conference, Australian Securities and Investments Commission senior manager Nick Coates said it is possible to scale advice while acting in a client's best interests.
There have been concerns around how scaled advice could be provided in a retail advice scenario outside of super funds which are granted a class order relief for the provision of simple or intra fund advice.
"Our guidance will say that you can limit fact finds as part of that [scaled advice] process," Coates said. "This has been a controversial point ... but ASIC's view is the best interests duty won't require a full fact find [in a scaled advice scenario]. Advisers are only required to make reasonable enquiries to obtain accurate information," he said.
ASIC's initial response to the legislation will come later this month in the form of a consultation paper that will contain concrete examples of scaled advice, Coates said. Formulating those examples has been a challenge and ASIC is looking forward to industry feedback, he added.
In terms of how scaled advice would fit with intra fund advice, the regulator is still waiting on more details on intra fund advice before it can flesh those issues out, he said. ASIC views intra fund advice as a subset of scaled advice, Coates said.
In response to a question from Minter Ellison partner Richard Batten, Coates said that as part of the regulatory overhaul RG200 would be repealed and the class order exemption to super funds providing intra fund advice would be removed.
Jo-Anne Bloch, financial advice leader at Mercer, said a key point was making sure scaled advice was available to all licensees. There was also a question over how and if transition to retirement advice can be provided in a scaled context, but Bloch said she didn't think it belonged in a scaled advice scenario.
Licensees would also need to work out how it would be priced and how the handover would be managed where a person receiving scaled advice, whether over the phone or in person, asks a question that falls into a holistic advice category and needs to be directed to a different part of the business.
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