RFA requirements 'inadequate'
Legal expert David Ireland said he thought the extent of disclosure regulations for RFAs was inadequate, compared to the obligations of AFAs.
“They need to say ‘this is my name and this is how you can complain about me’, the present form of disclosure requires them to say the sort of advice they’re able to give but there’s no prescribed obligation regarding the disclosure of fees.”
While all financial service providers must act with care, diligence and skill, there was a question over whether RFAs even had to disclose any conflicts of interest, he said. AFAs, by contrast, are required to transparently manage conflicts of interest and, if they cannot, should decline to act.
Ireland said many advisers would obtain informed consent from their clients in that situation and explain their conflict before getting their agreement to proceed.
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