Record-keeping requirements for AFSL advice licensees

ASIC Consultation Paper 247 Client review and remediation programs and update to record-keeping requirements (CP 247) proposes changes to the record-keeping obligations relating to the best interests duty.

Advice licensees are currently required to ensure that client records are retained that show how the licensee has complied with the best interests duty and related obligations. Licensees must be able to access these records even if a person other than the licensee retains the records.

This requirement applies when personal advice is provided by the licensee or one of its representatives. The records must be kept for at least seven years.

ASIC proposes to amend [CO 14/923] to clarify that an advice licensee must ensure not only that client records are kept, but also that AFS licensees must have access to records for the period of time in which the records are required to be kept, even if a person other than the licensee holds the records and even if that person is no longer authorised by, or related to, the licensee.

These changes are to be reflected by way of an amendment to Class Order [CO 14/923] Record-keeping obligations for Australian financial services licensees when giving personal advice.

The proposal arises out of difficulties in recent review and remediation programs where advice licensees have been unable to review the personal advice given to some clients because the licensee no longer has access to client records to determine whether or not the clients suffered a loss.

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