General advice exemption a scaled advice opportunity

Advisers have the opportunity to offer general advice to clients who want to make their own investment decisions or who don’t want to pay for a full advisory service, The Fold Legal managing director Claire Wivell Plater said.

“This would allow financial advice businesses to introduce a general advice model for this type of client,” Ms Wivell Plater said.

“If the business then arranges for the client to acquire the financial product, they can be remunerated by commission for the services.”

However, she warned that in full-service and ongoing advice relationships where a financial adviser has undertaken a detailed needs analysis and the client expects and pays for the adviser to recommend strategies and investments that will achieve their personal goals, advice will be personal.

“Businesses that want to provide general advice need to have a detailed understanding of when advice is considered general and when it is considered personal,” she said.

“In the early days of the AFS regime, there was some uncertainty over where to draw the line.

“But we’re pretty clear about it now – and we’ve got pretty good at developing sales process and training that ensure the adviser stays on the general side of the advice spectrum.”