ASIC releases guidance on limited advice
AFA News 10 December 2021. On Wednesday 1 December 2021, ASIC issued Information Sheet 267 on tips for giving limited advice. This is an important document as there has been a lot of concern since the release of the FASEA Code of Ethics on how to provide limited advice in a manner that is both consistent with the law and the FASEA Code of Ethics.
The Info Sheet provides some useful insight into ASIC’s expectations on the provision of limited advice, including the following key statements:
- Your advice model should not dictate what is, or is not, included in the scope of the advice.
- We consider that limited advice will be unlikely to meet the Best Interests Duty and related obligations if the client does not understand any of the significant limitations or qualifications that apply to it.
- You can adjust the level of your enquiries to reflect the nature of the advice sought by the client.
- You are more likely to be able to demonstrate that you have met the Best Interests Duty and related obligations when giving limited advice if you have adequate processes and systems in place.
- For example, if your advice is based on a client requesting a specific level of insurance cover, it is important that you ask how the client decided on the level sought.
In addition to Info sheet 267, ASIC has also issued an Example Statement of Advice for Limited Advice addressing a life insurance example.
For any questions on Info Sheet 267 or Limited Advice, please email firstname.lastname@example.org.
Issued 10.12.2021. AFA Policy & Education Update