Peter Kell the ASIC deputy chairman has suggested that advisers read the regulatory guidance before jumping to any conclusions and the FoFA best interest duty is not as strict as people think.
Kell’s comments come as the new FOFA reforms hit the three month mark and he said that there was still a couple of myths and misunderstandings. “There’s a perception that ‘best interest’ means that everything has to be gold plated and the consumer has to be better off immediately,” the ASIC deputy chairman said. Kell also reinforced the importance of reading the ASIC regulatory guides.
Kell has said of the rules, “that advice needs to be in clients’ best interest according to the views of “a reasonable advice provider and “the best interest duty does not require perfect advice. In fact, that can be counter-intuitive in relation to clients’ current circumstance.”
The financial regulator chief warned that advisers who utilised cheap, one-size-fits-all advice might find it more difficult to prove that they have acted in the best interest of the client and said that record keeping will become a priority to ASIC, reiterating that, “If you can’t outline in simple terms how advice has benefitted the client then there is a problem.”