Clients not getting appropriate advice: ASIC

In a recent review by the Australian Securities and Investments Commission (ASIC) on their release: Review of advice on retail structured products, almost half of the 50 reviewed files show that advisers failed to meet standards.

According to the report, the clients were not provided with enough options, provided advice based on incomplete client information, and were provided unsuitable gearing recommendations. In order for an advice to be deemed compliant, the advice should be relevant to the circumstances and objectives of the client and provided appropriate advice based on those investigations. There should be reasonable inquiries to the client’s circumstances, and this should be investigated thoroughly before the advice takes place. The ASIC also pointed out the level of expertise of advisers in question, as they failed to educate clients on the risks.

Protecting clients should be the utmost priority of these advisers. They should be accountable in providing clients not only with the benefits, but risks involved in certain situations as this is the only way we can ensure that clients are empowered. The best interest of clients should be second to none.

Read more about this on the Money Management website.