Will bank staff be mistaken for advisers?

ABA advisers banks staff personal advice banking the Senate Economics Legislation committee design and distribution obligations product intervention powers DDOs financial products

23 October 2018
| By Mike |
image
image
expand image

Bank employees may be misconstrued by customers has giving personal advice unless there is greater clarity injected into the Government’s Design and Distribution laws, according to the Australian Banking Association (ABA).

The ABA has used a submission to the Senate Economics Legislation Committee’s review of the Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Bill 2018 to restate that real risks exist of bank customers becoming confused by the design and distribution obligations (DDOs).

“To comply with the DDO and determine whether a consumer falls within a target market, distributors will need to take steps to understand the consumer’s circumstances,” it said. “In taking these steps, there is a risk that consumers will come to believe that (or, at least, be confused as to whether) the supply of the financial product has been made as a result of the consideration of their individual circumstances and is thus akin to receiving personal advice.”

It said customers might believe that because they had been supplied the financial product, a conclusion had been reached that it was appropriate for their unique circumstances, rather than because their circumstances matched those of the target market.

“This requires consumers to be able to discern between supplies of financial product on the basis of the DDO and supplies that are based on personal advice,” the submission said.

The submission also warned that to clarify the situation, staff would likely need to ask questions of customers about their personal circumstances, financial situation or needs and therefore risk being reach of other elements of the law.

“However, the client may also be left believing that their personal circumstances have been taken account of for purposes other than simply determining whether they fit the relevant target market determination,” it said.

 

 

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

Interesting. Would be good to know the details of the StrategyOne deal....

3 days 22 hours ago

It’s astonishing to see the FAAA now pushing for more advisers by courting "career changers" and international recruits,...

3 weeks 1 day ago

increased professionalism within the industry - shouldn't that say, FAR register almost halving in the last 24 months he...

4 weeks 1 day ago

Insignia Financial has made four appointments, including three who have joined from TAL, to lead strategy and innovation in its retirement solutions for the MLC brand....

2 weeks 3 days ago

A former Brisbane financial adviser has been charged with 26 counts of dishonest conduct regarding a failure to disclose he would receive substantial commission payments ...

2 days 20 hours ago

Pinnacle Investment Management has announced it will acquire strategic interests in two international fund managers for $142 million....

1 day 23 hours ago