The best interests duty
Section 961B of the Corporations Act 2001 (Cth) ("the
Act") requires a provider of financial product advice to act
in the best interests of the client in relation to the advice. This
duty will be satisfied if the provider proves that it has met the
following safe harbour requirements.
The provider must first identify the objectives, financial
situation and needs of the client. Next, they must identify the
subject matter of the advice. Then they must identify the
client's relevant circumstances. This refers to the objectives,
the financial situation and the needs of the client that would
reasonably be considered as relevant to the advice sought on the
subject matter. If any of the information relating to the
client's relevant circumstances is incomplete or inaccurate,
the provider must make reasonable enquiries to obtain complete and
accurate information.
