By: Jon Ireland
Proposed amendments to the best interests duty under the
Government's Future of Financial Advice amendments Bill target
perceived issues with the current formulation of the duty - in
particular with respect to scaled advice.
These amendments adjust the "safe harbour" steps
(which can be relied on to satisfy the duty) and remove the
catch-all provision at the end of the steps. As the FoFA amendments
are paused for further consideration, thought should be given to
the view taken by the changes and associated commentary on scaled
advice.
The Bill's explanatory memorandum justifies the changes as
being needed to facilitate the provision of scaled advice and to
address uncertainty around the scope of the catch-all. However,
there are potentially broader implications arising from the FoFA
amendments. Not only do they adjust the relationship between the
best interest duty and scaled advice, they also revisit the concept
of scaled advice itself.
