Under a limited AFSL License can you recommend rolling funds into SMSF?
No
What ‘class of product advice’ is allowed under limited AFSL
o superannuation products o securities o simple managed investment schemes o general insurance products o life risk insurance products o basic deposit products
What is class of product advice?
?
Which act is the best interest duty in Corps act
961G
Who’s duty to comply with best interest duty
Advice provider.
FDS must be given within (days)
60 days
Opt in terminates xxx days after anniversary
30
If continuing to charge fees after opt in and fds then it is a xxx penalty
civil
Conflicted remuneration is $ that could
- Reasonably be expected to influence choice of product
2. Reasonable be expected to influence the product advice.
Not conflicted rem if:
- General Insurance
- Less than prescribed amount
- Genuine training purposes.
- Info on technology or software support
As a limited AFS the firm does not need to lodge an auditors report - instead a
annual compliance certificate
What is the purpose of the FDS statement
To help client’s ascertain whether they are receiving a service from their advisor that is commensurate with the ongoing fee they are paying.
Insurance premium commission is ongoing fee
False
What must be included in the FDS (3)
Fee Amount
Services provided
Services entitled to.
Is a clients decision to provide free tickets in exchange for free advice and ongoing fee. Why?
No - because each year the client makes the decision whether or not to but the tickets.
Explain what you must do for ongoing fee arrangement
- within 60 days of renewal notice day, give opt in and FDS
2. opt in must have a statement that the renewal period is 30 days from when the opt in is given.
Simple path through conflicted rem(3)
- Is the renumeration coming from client and has client consented? (ok so far)
- If the ongoing fee more than 12 months - if so FDS/ RN
- is the benefit coming from other entity. Could it reasonably be expected to influence the advice - if yes, then conflicted rem
Conflicted rem is all commissions excluding
Certain life insurance commissions
Conflcted Rem (4)
- Commissons
- Volume based payments
- Potentially - non monetary benefits.
- % fees on borrowed money
When is the onus on proof on the receiving party to show that the remuneration is not conflicted?
Volume based payments.
Name 5 circumstances where non-monetary is not conflicted rem
Benefit for General Insurance
Small value - e.g.
Is brokerage conflicted rem?
No - excluded
Criminal liabilities are what main things:
- Lack of disclosure documents
- Misleading statements
- Hawking provisions
Does FDS include pre- FOFA clients
Yes
