Best interests duty for financial advisers (s 961B-G)
Personal advisers must act in client's best interests + meet related obligations.
Who must comply
Personal advisers (relevant providers).
What triggers it
Providing personal advice to a retail client.
When due
Continuous per engagement.
Evidence required
SOA; client-best-interests-duty record; conflict register; prioritisation evidence.
Max penalty
Civil penalties to financial services maximum ($16.5M / 3× / 10%)
Summary
Sections 961B-961G Corporations Act + ASIC RG 175 require providers of personal advice to retail clients to: (1) act in client's best interests; (2) provide appropriate advice; (3) warn if advice based on incomplete/inaccurate info; (4) prioritise client's interests over their own.
Enforced by
Source legislation
Topics
Related obligations
- CWLTHComply with AFSL general obligations (s 912A)AFSL holders must do all things necessary to ensure financial services are provided efficiently, honestly and fairly.
- CWLTHReport reportable situations to ASIC within 30 days (RG 78)AFSL/ACL holders must report reportable situations within 30 calendar days of becoming aware.
- CWLTHComply with Design and Distribution Obligations (DDO)Issuers and distributors of retail financial products must have a Target Market Determination (TMD) and distribute consistently with it.
- CWLTHMaintain adequate PI insurance (AFSL holders, RG 126)AFSL holders providing financial services to retail clients must hold adequate professional indemnity insurance.
- CWLTHBan on conflicted remuneration (FOFA)AFSL holders and representatives must not accept conflicted remuneration in connection with retail financial product advice.
- CWLTHMaintain AFCA membership (mandatory external dispute resolution)AFSL + ACL holders must be members of AFCA — sole AU EDR scheme.
Frequently asked questions
- Who must comply with Best interests duty for financial advisers (s 961B-G)?
- Personal advisers (relevant providers).
- What triggers Best interests duty for financial advisers (s 961B-G)?
- Providing personal advice to a retail client.
- When is Best interests duty for financial advisers (s 961B-G) due?
- Continuous per engagement.
- What is the maximum penalty for Best interests duty for financial advisers (s 961B-G)?
- Civil penalties to financial services maximum ($16.5M / 3× / 10%)
- What evidence is required for Best interests duty for financial advisers (s 961B-G)?
- SOA; client-best-interests-duty record; conflict register; prioritisation evidence.
Source: https://asic.gov.au/regulatory-resources/find-a-document/regulatory-guides/rg-175-licensing-financial-product-advisers-conduct-and-disclosure/. Rules Mate is not a law firm. Always verify against the live regulator source before acting.