Financial Planning

ASIC to review limited advice

ASIC limited advice

ASIC will ask advisers what barriers have been created by regulation and licensees that stop the provision of limited advice.

Financial advisers will be able to tell the Australian Securities and Investments Commission (ASIC) what regulatory barriers they believe the regulator has put in place to prevent the provision of limited advice as part of a new consultation paper to be released in November.

ASIC financial advisers senior executive leader Kate Metz said despite the regulator producing guidance on this issue in the past, some segments of the advice industry still found it hard to provide limited advice.

“Access to advice is something we have been actively thinking about for a long time and we are putting out a consultation paper in November which specifically looks at what impediments there are for industry to provide affordable and limited advice,” Metz said during a regulators’ panel session today at the Association of Financial Advisers’ national conference, Vision 2020.

“We are really keen to hear what it is in ASIC’s control that we can change to help the industry and also asking industry to think about what it is within their control that can be changed.”

She said the reason ASIC wanted to hear what barriers existed from a regulatory and industry point of view was that the regulator has in the past, through guidance documents, given its support to limited or scaled advice and provided examples of how that could work.

“We are hearing from some quarters that licensees don’t want their advisers in that space and we don’t know how widespread that view is, but it is a view we are hearing more frequently,” she said.

She added licensees were not restricted from offering limited advice and did not need to wait for specific instructions from ASIC on how they could offer that service.

“Advisers and licensees should not be waiting as the law does not stop them doing this now,” she said.

“There is a misapprehension that ASIC is there to crack down on everybody, but where we take action against people is for really egregious conduct.

“The vast majority of financial advisers do the right thing, so we want them to use their professional judgment and to be able to service clients in a sensible way,” she said, adding ASIC also wanted to see shorter advice documents, including statements of advice.

She said ASIC was looking at simplifying some of the guidance it provides and improving the ways it communicates with advisers and will seek feedback about these in the consultation paper.

“We are open to suggestions and are here to help. We don’t want to continue with the status quo where people feel they are unable to provide limited advice or they are trapped into thinking they need to be producing lengthy documents that consumers are never going to read,” she said.

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