Advisers tackle client-first question

Fred Dodds

As you would expect, there was a range of views expressed. But by the end of the discussion it was agreed we had arrived at a reasonably common landing point.

There is no groundswell to change “putting the interests of the client first” as the paramount rule for the delivery of financial advice.

Other jurisdictions have different standards, but in a number of jurisdictions that have “best interests” as their headline standard, the concept is limited or watered down by other pieces of regulation e.g. Australia has legislated for best interests; however nowhere do they explain what best interests actually is – rather they provide a safe harbour of seven steps for an adviser to follow, and if they do, they will be deemed to have met the best interests duty.

The fact of the matter is that Government has determined to impose a statutory conduct obligation on the providers of financial advice to place the interests of the consumer first. That is to be the standard for all advisers, not just AFAs.