Under the current regulatory regime, financial advisers have an obligation to exercise care, diligence and skill, and not act in a way that is misleading, deceptive or confusing to the client.
However, under the incoming regulatory regime starting 15 March 2021, advisers will need to be more prescriptive and tailor their disclosure to clients based on the products they are offering and the advice they are providing.
MBIE concedes this new system, which moves away from a standard disclosure and tick-box exercise “…makes it slightly harder to comply with” but says it is more flexible.
Given there is no dollar amount, above which rewards or gifts should be disclosed, the adviser has to make a judgment call on what to tell their clients during a consultation. Which brings us to this week’s poll question…
Should advisers be required to disclose all soft dollar incentives they receive?
- Yes (53%)
- No (45%)
- Not sure (1%)
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