A key part of the regime for regulating financial advisers is requiring financial advisers to provide a disclosure statement to clients before or if not practicable before, as soon as practicable after providing the service.
Please read the information here on how to create your disclosure statement.
The Financial Advisers Act outlines the following requirements.
A financial adviser must make disclosure in accordance with this Act and the regulations. (s22)
Advisers will be split into 3 categories:
- Authorised financial advisers (i.e. those able to give advice on all financial products)
- Registered financial advisers (i.e. those able to give advice on only simple category 2 financial products)
- QFE employees and nominated representatives (i.e. those able to give advice on category 2 financial products, and the category 1 financial products of which the QFE is the issuer or promoter).
S23 states what all financial advisers may have to disclose (subject to regulations):
Ø contact details:
Ø the type of financial adviser:
Ø financial adviser services provided (including financial products in relation to which a financial adviser service is provided):
Ø fees:
Ø material interests, relationships, or associations
Ø remuneration:
Ø dispute resolution arrangements:
In addition, AFAs must disclose
Ø professional or business experience relevant to performance of a financial adviser service:
Ø criminal convictions:
Ø disciplinary proceedings:
Ø adverse findings by a court or the Commission:
Ø bankruptcy or other insolvency proceedings:
Ø indemnity insurance:
Ø matters required to be disclosed by the authorised financial adviser’s terms and conditions of authorisation
Disclosure requirements by a QFE or a member of a QFE (s25)
Ø contact details:
Ø the type of financial adviser:
Ø the QFE’s dispute resolution arrangements:
Ø matters required to be disclosed by the QFE’s terms and conditions of a grant of QFE status: 5
Ø whether the QFE provides any other licensed service.
S24 prescribes that the disclosure statement must
Ø be in writing; and
Ø state when it was prepared; and
Ø state the name, address, trading name (if any), telephone
Ø number, fax number, and email address of the financial adviser; and
Ø be provided to the client; or delivered or sent to the client at the client’s last known address or an address (including an electronic address) specified by the client for that purpose.
Regulations may provide for the form that a disclosure statement must take.