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ASIC releases guidance on limited advice

asic new smsf
Miranda Brownlee
01 December 2021 — 2 minute read

The corporate regulator has released guidance aimed at helping advisers comply with their obligations when providing limited advice, including advice on superannuation.

ASIC released Information Sheet 267: Tips for giving limited advice this week, which includes information on what advisers can do to meet their obligations under the law, including the best interests duty and related obligations as well as the FASEA Financial Planners and Advisers Code of Ethics when giving limited advice.

The guidance stresses that advisers should not limit the scope of the advice to exclude critical issues that are relevant to the subject matter of the advice sought by the client.

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“For example, if you specialise in superannuation or insurance, in certain client situations you may need to consider the client’s existing superannuation and insurance policies [and] retirement planning for a client if it is integral to the client’s overall superannuation and insurance strategy,” the information sheet stated.

“In these scenarios, your advice model should not dictate what is, or is not, included in the scope of the advice.”

The guidance explains that where a licensee authorisation or advice model does not allow the adviser to provide the scope of advice required, it may be appropriate for them to refer their client to an adviser who does have the relevant authorisations, expertise and capacity, to address the relevant advice areas.

The information sheet also states that when identifying the scope of the advice, advisers may also need to address advice topics that fall outside the scope of the advice.

“You should ensure that your records clearly demonstrate the reasons why certain topics relevant to the client are not in scope and why it is still possible to act in the best interests of the client and provide appropriate advice in doing so,” the guidance stated.

“This requires you to use your professional judgement to consider your client’s relevant circumstances and explain the implications of your advice recommendations.”

The guidance also states that advisers must make reasonable inquiries to obtain complete and accurate information.

ASIC said that advisers should consider whether the information initially provided to them by the client allows them to sufficiently identify the client’s relevant circumstances.

“For example, if a client says they don’t think they have any insurance within their existing superannuation accounts, you need to make your own inquiries with the client’s superannuation providers to ensure relevant information is not overlooked,” the guidance stated.

“This includes reviewing the client’s latest superannuation statements or obtaining authorities to inquire about the client’s accounts.”

ASIC commissioner Danielle Press said that ASIC recognises that many consumers prefer to seek limited and specific advice rather than comprehensive advice.

“We also understand that industry faces some barriers to providing limited advice, including a lack of clarity about the regulatory requirements,” said Ms Press.

“We expect this guidance will provide regulatory certainty to industry and help reduce compliance costs. It will assist financial advisers in their efforts to make these forms of advice more available to consumers and assist them in delivering quality advice in a timely, affordable, and compliant manner.”

Miranda Brownlee

Miranda Brownlee

 

Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.

Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years. 

Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.

You can email Miranda on: This email address is being protected from spambots. You need JavaScript enabled to view it.

ASIC releases guidance on limited advice
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