RG121 Flashcards
What is financial product advice
Any statement that intends to influence a person’s decision in relation to a financial product
Disclosure requirements in relation to financial services only relate to …
retail clients
Definition of Wholesale
- Purchasing product above threshold - e.g. $500k
- Net assets of over $2.5M or gross income of $250k for last two years
- a professional investor - e.g. AFS Licensees, Listed entities, banks
You will require an AFS licence if you…
Carry on a financial services business in Australia.
As an AFS licensee, you must comply with the following general obligations
under s912A and 912B: (10)
- do all things to necessary - Efficiently, Honestly and Fairly
- Adequate arrangements for conflicts
- Comply with AFS licence conditions
- Comply with Financial Services Laws
- Have adequate resources
- Maintain the competence required.
- Adequately train
- Have dispute resolution if financial services provideed
- Adequate risk management systems
- Compensation arrangements in place
as an AFSL licensee you need to comply with the following conduct obligations (5)
- Notify of significant breaches
- Assist with regulatory oversight
- quote AFSL in documents
- Comply with procedures in relation to dealing with other peoples money
- Keep financial records
There are additional obligations if you provide advice to a ______ these obligations vary depending on if it is ______ or ________
a retail client
general or
personal
It’s personal advice if (2)
- Considered client’s objectives, financial situation and needs.
- reasonable person might have expected the provider considered one or more of those matters.
If providing personal advice (5):
- Give an SOA,
- Act in best interest
- Only provide advice if the advice is appropriate
- If incomplete info - warn the client
- If conflict - give priority to clients
If providing general advice need to:
Give general advice warning
What is the general advice warning?
Does not take into account their objectives, financial situation or needs.
Do you need to hold authorisation if an employee or director of principle?
No
Most responsibilities are on the AFSL - however teh following are obligations of the representatives
- FDS - where rep is providing entity
- Hawking provisions
- PDS obligations
- Market misconduct provisions
- Consumer protection (market misconduct)
If offering product - need to provide PDS - what are two exemptions
- Dealing with an AFSL licensee
- professional investor
