Record-keeping obligations of financial advisers

Keeping proper records of advice to clients and transactions is a key Corporations Act requirement for evidence that financial services are provided efficiently, honestly and fairly.

ASIC has released Consultation Paper 214 Updated record-keeping obligations for AFS licensees (CP 214) containing its proposals for the types of records that must be kept to prove that the licensee and its representatives have complied with the best interests duty and related obligations under FOFA and obligations that apply to superannuation trustees when giving personal advice for which they charge members collectively as intra-fund advice under the Stronger Super reforms.

CP 214 also discusses:

  • records of ongoing fee arrangements entered into with a client
  • copies of documents – such as, fee disclosure statements and renewal notices – that fee recipients must receive for an ongoing fee arrangement, and
  • records to prove the licensee and its representatives have complied with the ban on conflicted remuneration for both personal and general advice.

It is expected that a Class Order will be finalised by December 2013 but ASIC will not strictly enforce the proposed record-keeping obligations until 30 June 2014.

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