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ARTICLE · 22 AUGUST 2014

Part II: FOFA changes to best interests - A storm in a tea cup?

The article discusses the law in relation to the giving of financial advice and the best interests duty to a client.

AustraliaFinance and Banking

The best interests duty must relate to something The laws that protect us from each other have developed largely through cases. A case occurs when a particular transaction goes wrong. There will always be involved the parties to the dispute (namely a relationship of some sort) and a task (the thing that hasn't been done properly). Accordingly it is always necessary to ask two questions to identify the duties that the law imposes and what those duties must be applied in relation to.

The first question is "what is the relationship between the parties"? This might give rise to some or all of: contractual duties, tortious duties, fiduciary duties and statutory duties. Those duties will be to the effect that one party must act towards the other in a particular way, but it leaves the question open, in relation to what?

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