AFA News 24 June 2021. Financial advisers are reminded that the new obligation to disclose a lack of independence commences on 1 July 2021, and where applicable FSGs must be updated. ASIC have provided a legislative instrument setting out the requirements and a draft example.
The new requirement for financial advisers to disclose a lack of independence commences on 1 July 2021, with FSGs needing to be updated from that point. Time is running out to meet this new obligation.
This obligation applies to all financial advisers who do not meet the requirements of Section 923A of the Corporations Act to use the terms “independent”, “impartial” and “unbiased”. We recommend that you have a read of Section 923A to understand this, however the most important factors that will prevent an adviser from using these terms are the receipt of commissions for life insurance advice and circumstances where your licensee is owned or partially owned by a product provider.
ASIC have issued a legislative instrument that sets out the obligations with respect to this disclosure, including the following:
- It must be on the first substantive page,
- Must be in a box with a bold heading like “Lack of Independence”,
- Must be in the same font size as other content on the page, and
- Must not be a footnote.
For any questions on the new Lack of Independence disclosure, please email firstname.lastname@example.org.
Issued 24.06.2021. AFA Policy & Education Update