Standard form disclaimers not enough for FOFA
Standard form disclaimers will not be sufficient with respect to financial advisers providing limited advice, according to an analysis of the Future of Financial Advice (FOFA) bills provided by Middletons Lawyers partner Jim Bulling.
Bulling's analysis, published by Middletons last week, said it was clear already that the legislators were expecting that financial advice would only be limited to particular subject matters as a result of informed discussions between the financial adviser and the client, and "not just through a standard form disclaimer".
"Furthermore, the adviser will still need to consider the appropriateness of the client seeking advice only about the subject matter," he said.
Bulling cited the example of where a retail client sought financial advice about investing in highly leveraged contracts for difference (CFDs) using funds borrowed against the family home.
"It may be reasonable to expect the financial adviser to query the appropriateness of such limited advice," he said.
Elsewhere in his analysis, Bulling said regardless of whether further amendments were needed to the FOFA legislation, it appeared likely scaled advice would remain a feature of the financial planning landscape.
"However, financial advisers attempting to provide scaled advice will need to take care in fulfilling the best interests duty," he said.
AUTHOR
Mike Taylor
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