Compliance Costs Addressed by ASIC in Guidance on Limited Advice


ASIC has released an information sheet on limited advice and an example SoA to assist advisers and advice licensees reduce compliance costs when providing limited personal advice to retail clients.

The commission says its Information Sheet 267 includes details on what advice providers 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.

It says the new information sheet also summarises relevant guidance from Regulatory Guide 175 Licensing: Financial product advisers—Conduct and disclosure, and Regulatory Guide 244, which provides information, general advice and scaled advice on what advice providers can do to meet their legal obligations when giving limited advice.

Danielle Press…expects this guidance will provide regulatory certainty to industry…

ASIC Commissioner Danielle Press says 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.”

…ASIC expects this guidance will provide regulatory certainty to industry and help reduce compliance costs

She says ASIC expects 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.”

The SoA example is annotated to help advisers understand the relevant requirements under the Corporations Act 2001. This new guidance follows the recent release of ASIC’s guidance and example records of advice.

Industry Response

A Financial Services Council spokesperson says that changes such as removing the safe harbour steps and overhauling the advice process is the best way to incentivise the provision of limited advice to consumers.

“Nevertheless, the release of this guidance from the regulator to support compliant limited advice under the current framework is welcomed.”

Meanwhile, the Financial Planners Association says that the establishment of a consolidated information sheet like this is a very useful tool for ASIC to develop and it welcomed ASIC’s initiative, encouraging the commission to work on information hubs for other issues which are similarly complex.

The association says that it has been calling on ASIC to create consolidated information sheets and hubs for several years to address complexity.

“For example, in relation to limited advice, a planner would need to cross-reference three regulatory guides to understand their obligations.”

ASIC says it undertook targeted consultation with industry on INFO 267 and the example SoA. It also consulted FASEA which confirmed the SoA example is consistent with advisers’ obligations under its Code of Ethics.

It adds that in developing INFO 267 and the example SoA, ASIC also considered the industry’s response to recent consultations, including on promoting access to affordable advice for consumers.

It says that responses to this indicated that industry would benefit from an updated example SoA that was shorter and more client-friendly.

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  1. What we are dealing with now, is an ever growing maze of complexity that requires walking through two other mazes to find our way to the exit.

    It has reached a point where every step is creating a different interpretation, though the outcome is still the same.

    This should be named the “Hotel California Syndrome,” where you can check out any time but you can never leave.

    The Government and the Regulators have listened to the Lawyers and Intellectuals who have never lived in the real world, taken their word as gospel and hand in hand, walked down the path of zero common sense, then upon realising they have caused absolute chaos and financial destruction with no way out, have come up with the fabulous idea of asking these same people to fix the issues that they caused.

    Lawyers are incapable of fixing anything in a manner that is easy to follow that also does not have numerous traps to catch everyone out by Legalize interpretation.

    In two years, thousands more experienced Advisers will be gone and the legal eagles will still be debating legal wording.

    Maybe they should be given the title of “Nero Syndrome.”

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