- Learn about important regulations and standards that may apply to those providing financial advice
- The Australian Securities and Investments Commission imposes regulations to firms offering financial advice
- In addition to applicable law, Chartered Accountants ANZ sets out key standards that must be met in providing financial advice
- The type of advice that you may be entitled to provide varies depending on whether or not you operate under an AFSL
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New opportunities, strict standards
Offering financial advice has the potential to create new opportunities. However a number of regulations and professional standards apply to Chartered Accountants who offer financial advice services.
The corporate regulator ASIC imposes various regulations on those wishing to offer financial advice through various pieces of legislation including the Corporations Act 2001 (Cth).
Additional obligations are mandated by Chartered Accountants ANZ and the Accounting Professional and Ethical Standards Board (APESB).
Licensed or unlicensed advice
Chartered Accountants ANZ's Financial Advice and Regulations: Guidance for the accounting profession outlines what services you can and cannot provide if you do not hold or operate under an Australian Financial Services (AFS) licence (i.e. you are unlicensed), and provides some guidance on operating under a limited AFS licence.
This financial services license guide has been developed for use by members in public practice in Australia.
Some general obligations of financial advisers
A key requirement when you hold an AFSL is a commitment to provide financial advice efficiently, honestly and fairly while complying with the conditions of your licence under the Corporations Act 2001.
Holding an AFSL also requires you to comply with a number of other obligations under the Corporations Act 2001 (Cth). Some of these are set out in the table below.
|Obligation||ASIC Regulatory guide|
|Financial requirements||RG 166|
|Organisational competence and Responsible manager||RG 105|
|Meeting the general obligations - Compliance, Risk management and monitoring and supervising representatives||RG 104
|Training of financial advisers||RG 146|
|Managing conflicts of interest||RG 181|
|Internal and external dispute resolution||RG 165|
|Compensation and insurance arrangements for AFS licensees||RG 126|
|Disclosure: Product disclosure statements (and other disclosure obligations)||RG 168
|Financial product advisers - conduct and disclosure||RG 175|
Chartered Accountants ANZ has developed a guide, “Limited Australian Financial Services licensing: Your obligations”, which sets out some of the obligations applicable to those holding or operating under a limited AFS licence.
The templates below have been developed for a limited licensee where all applicable and required licence authorisations have been granted. If you have been granted a limited licence for a narrower selection of authorisations or hold / are a representative of a full licence, you must seek your own advice about the appropriateness of these documents.
Other resources available regarding licensing obligations for limited licensees include a Compliance Manual, Risk register, Statement of Advice (SOA) template and Financial Services Guide (FSG) template. These resources are available for CPP holders and can be requested by emailing our financial services team.
Future of Financial Advice (FoFA) reforms
The introduction of the FoFA regulations focused on improving the quality of financial advice and building consumer trust and confidence.
The FOFA regulations have created a number of obligations related to providing financial advice. These include, amongst other things:
- An obligation to act in the best interests of each client
- A ban on conflicted remuneration – either monetary or non-monetary, given to a licensee or their representative, who provides financial product advice (personal and general) to retail clients, which could reasonably be expected to influence the choice of financial product recommended or the financial advice given.
- A requirement to disclose ongoing fee arrangements to those clients receiving financial advice - through fee disclosure statements and renewal notices.
Chartered Accountants ANZ has also developed fact sheets and checklists on Opt In, Best Interest Duty and Conflicted remuneration to assist members. These can be downloaded below.
APES 230 – Financial Planning Services
APES 230 – Financial Planning Services sets out the professional and ethical standards issued by the APESB that apply to members of Chartered Accountants ANZ.
APES 230 details certain professional and ethical requirements for professional accountants who provide financial planning and credit advice.
APES 230 is in many respects an extension of the previous standard APS 12 Statement of Financial Advisory Services, it goes further and sets new benchmarks. This is important to build confidence in the provision of financial advice by members of Chartered Accountants ANZ
All members of Chartered Accountants ANZ, who provide a Financial Planning Service are required to comply with APES 230.
To assist our members, Chartered Accountants ANZ has developed a guide with further information on the APES 230 standard.
APES 230 Guide
You can download the APES 230 GuideDownload guide
Other regulations and standards that apply to providing financial advice
"Financial planning services" are included in the definition of “public accountancy services”. This being the case, members who are principals of a financial planning practice and/or representatives of an AFSL-providing financial planning service, are required to hold a CPP and, amongst other things, meet the related obligations under CR2 of our members handbook.
A key resource for member obligationsRead more