Australian Financial Services Licensing (AFSL) Forum

#3267 Reply

amelia-w
Member

Hi KMack,

The following are two quite different scenarios:

(a) A client deciding to terminate dealings with Licensee 1 and commence dealings with Licensee 2
(b) Licensee 1 assigning their rights under an ongoing fee arrangement with a client to Licensee 2.  In this case Licensee 1 would be the ‘assignor’ you referred to, and Licensee 2 the ‘assignee’

The scenario you outline appears to relate to situation (a). In this case Licensee 2 would treat the client as a new client and would not need to have regard to any prior arrangements the client may have had with Licensee 1 or any other previous advisors. This is in contrast to the circumstances in situation (b).

For more details regarding what needs to be included in a FDS for a new client, refer to ASIC’s RG 245. If you require guidance regarding a particular situation, however, you may need to seek legal advice. If you think we can be of help, don’t hesitate to contact us via email (law@hnlaw.com.au) or drop us a line (03 9670 8200).

Author: David Court
Co-contributor: Amelia Walsh

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