Are you selling a financial advice product?
23 January 2020
Financial services include financial advice products. Here’s a guide to help you determine if you are selling a financial advice product based on section 766B Corporations Act 2001 (Cth).
So what exactly is financial product advice?
Financial product advice
Financial product advice means a recommendation or statement of opinion or a report that is meant to influence a person into making a decision about a financial product or class of financial products or could be reasonably regarded as being intended to have such an influence.
Also, financial product advice can be personal or general. We'll go through each below.
Personal financial product advice
Personal advice is advice that is given to a person (including by electronic means) where: the provider of the advice as considered one or more of the person’s objectives, financial situation and needs (otherwise than for the purpose of anti-money laundering or counter terrorism financing rules or laws or a reasonable person might expect the provider to have considered one or more of those matters.
General financial product advice
General advice is defined as advice that is not personal financial product advice - sound’s like a wide definition right?
Below is further guidance on what is not financial advice:
- legal advice by a lawyer in the ordinary course of their activities as a lawyer including matters of law, legal interpretation or the application of law.
- registered tax agent or BAS agent advice that is given in the ordinary course of activities like an agent.
Advice about costs is not financial advice if:
- it's in response to a request made by a person (inquirer) to another person (provider), the provider tells the inquirer the cost, or an estimate of the likely cost of a financial product; and
- that cost or estimate is worked out by reference to a valuation of an item
The below examples are not financial product recommendations.
Where a person makes an inquiry to a provider and the provider gives information about:
- the cost of a financial product;
- the rate of return on a financial product; or
- any other matter identified in regulations.
Do you have questions or comments about financial advice products? Be sure to leave them below.