Committee proposes FSLAB changes
A significant proposed change is to the duty to give priority to clients’ interests.
The committee said the duty as it was written would stop advisers recommending a product that might advance their own interest, such as earning them a commission, over one that would better serve the client.
“However, we accept that providers should not have to consider every product on the market when making recommendations. We also accept that advisers should be able to give advice on a single product, provided the adviser says so and discloses and manages any conflicts of interest. We accept that the requirement to give priority to the client’s interests, including by taking all reasonable steps to manage conflicts of interest, could allow for an unnecessarily broad interpretation.”
To ease concerns, the committee suggested amending the wording so that the adviser was required to give priority to a client’s interests if they knew there was a conflict between those interests and their own or those of a person connected with the giving of the advice, such as the financial advice provider, or a person associated the financial provider or an interposed person.
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