The Financial Adviser Standards and Ethics Authority (FASEA) believes advisers operating under a limited Australian financial services licence can still play role in the advisory landscape despite concerns the new code of conduct requirements are prohibitive for these types of licensees.
“There is, in our view, a role for limited advice or scaled advice or scoped advice. It’s how you give that advice and be satisfied, that in the terms of that arrangement, that what you’re giving is the best advice for the client, in the interest of the client,” FASEA chief executive Stephen Glenfield said during a recent SMSF Association webinar panel discussion.
“[So] if someone comes up to you and says I want to set up an SMSF, [that’s asking you to do] some exploration [to see if] an SMSF is the right superannuation [vehicle] for them.”
Glenfield said the exploration involves processes such as assessing whether the client has the appropriate level of financial literacy to enable them to run their own super fund and are processes any good practitioners would be undertaking.
“I think a lot people have [interpreted the new rules] as [meaning] you have to go to the full scaled assessment of the person to [provide] that advice. We’re not saying that,” he said.
“What we’re saying is you need to have done enough investigation to know that what you’re recommending is appropriate for [the client] in their circumstance.”
He acknowledged the feedback received about the code from advisers to date indicates FASEA needs to address how scaled or limited advice works within the code as part of the next round of guidance it releases.
“The underlying principle is the same – be satisfied that what you’re doing is in the interest of the client, that the client understands it and understands the value,” he noted.
During the same panel session, he outlined the feedback process for advisers who had failed the FASEA financial adviser exam.
