The Australian Securities and Investments Commission (ASIC) has released information around the use and content of a record of advice (ROA), indicating they can be provided in regards to limited investments or where no product advice is given.
The corporate regulator released the details in Information Sheet 266, which covers the use, preparation and filing of ROAs, as well as when a statement of advice should be issued instead of an ROA.
In the information sheet, ASIC stated an ROA is “often given to existing clients to confirm changes to, or implementation of, advice that has been provided in a previous SOA”.
It added that an ROA can provide further advice if an SOA has already considered the client’s relevant circumstances and they have not changed significantly, but if the latter is the case, an SOA should be provided.
An ROA can also be used where it does not provide advice about the buying or selling of a product, nor the modification of investments or contributions in a product already held by a client and where the adviser does not receive benefits in relation to the advice and discloses any potential conflicts of interest.
Where an ROA does cover investment advice, the information sheet stated it could not exceed $15,000 and that limit applied to all investments to which the advice related.
The information sheet also restated the use of ROAs in relation to COVID-19-related issues where an ROA could be used in place of an SOA to provide advice if the advice addressed issues directly caused by the pandemic.
The information provided by ASIC is presented as a series of frequently asked questions and includes three examples of the provision of an ROA.
The new guidance follows industry consultation into ways to reduce the cost and complexity of advice, which attracted more than 460 responses from the advice sector, and ASIC noted the Financial Adviser Standards and Ethics Authority had confirmed the information was consistent with adviser obligations under its Code of Ethics.
“This is the first of ASIC’s initiatives developed in response to the financial advice industry’s recent feedback on our consultation to improve consumers’ access to affordable advice,” ASIC commissioner Danielle Press said.
“We expect this practical guidance and information will provide clarity and certainty to financial advisers about when and how they can use ROAs.”
