Australian Financial Services Licensing (AFSL) Forum

#4614 Reply

Hi Giorgia,

Thank you for your question.

The previous advice based on requirements to have a reasonable basis for providing advice has now been replaced by the best interest duty. The best interest duty is a form of consumer protection and only applies to retail clients.  We refer you to ASIC Regulatory Guide 175 which contains information on these obligations. As wholesale clients are generally assumed to have greater investment knowledge and experience, the provisions recognise that they do not require the same degree of protection.

Risk profile questionnaires are widely used throughout industry to assist financial providers in understanding their clients’ risk appetite to ensure that advice is appropriate to the client .

For further information please contact our financial services team.

Author: Michelle Chasser
Co-contributors: Joanne Lee and Greta Walters

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