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39 Cards in this Set
- Front
- Back
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how many steps to financial planning process
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6 |
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describe financial planning process
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2 establish financial goals 3 analyse data 4 make an SOA 5 implement strategy 6 review / revisit |
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what counts as a financial service
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a) provide financial product advice b) deal in a financial product c) make a market for a financial product d) operate a registered scheme e) provide custodial service f) provide trustee company services g) engage in conduct prescribed by corporations act |
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what determines what a financial service is
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ASIC regulatory guide (RG) 36.2 |
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what counts as a financial product advice
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recommendation/statement of opinion that is intended to influence a person in making a decision about/interest in a financial product, or reasonably regarded to have influence
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what does s766A refer to
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section 766A in the corporations act (2001) |
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what is a financial product |
facility through which a person: a) makes a financial investment b) manages financial risk c) makes non cash payments |
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what are some relevant special |
margin loans, life insurance, super |
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Regulatory context |
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how has regulatory context changed |
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what is the BID |
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what key documents are required when providing financial advice |
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role of ASIC |
- make regulatory guide for financial advice - allow you to give financial advice - approve public security issuing |
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describe aus financial regulatory history |
1997 financial system inquiry 1 2001 FSRA/corps act 2009 ripoll report precipitated 2012 FOFA 2014 financial services inquiry mark 2 was a fizog |
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outcomes of financial system inquiry 1 |
1 APRA 2 ASIC + corporations act + RG + FSRA 3 ATO regulating SMSF's 4 Financial Services License 5 KYC + KYP |
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difference between ASIC and APRA |
APRA is involved in instituional safety whereas ASIC is involved in consumer safety/protection |
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who regulates SMSF's |
ATO |
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what is APRA, ASIC, ATO, SMSF, FSRA, AFSL stand for |
aus prudential regulation authority, australian security and investment commision, aus tax office, self managed super fund, financial services reform act, aus financial services license |
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how does ASIC regulate financial advice |
its issues and monitors AFSL's to licensees which are required to provide financial services |
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who can provide financial advice |
AFSL licensee or authorised representatives |
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purpose of ripoll report |
investigate and tackle conflicts of interest in financial planning industry through storm financial |
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key FOFA changes |
1 BID introduction 2 ban on commissions 3 introduced % fee structure 4 introduced 2 year opt-in (new clients) 5 Fee disclosure statement 6 more ASIC powers |
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describe BID steps |
1 identify objectives based on instruction 2 identify: a) subject matter of advice sought by client and b) what info is relevant to subject matter 3 inquire to obtain complete info if reasonably apparent info is incomplete 4 assess whether the adviser has expertise to give sought advice 5 if reasonable to recommend product a) investigate fin. products b) assess research 6 all judgement based on clients relevant circumstances 7 take any other steps |
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BID purpose |
reduce conflict of interest btwn client and adviser |
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# of bid steps |
7 |
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safe harbour provisions before BID |
know your client, know you product |
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required documents according to Corporations Act |
1 FSG 2 SOA 3 PDS 4 FDS 5 opt-in agreement |
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what is a ROA
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record of advice |
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describe an ROA |
a record of advice in place of an SOA can be given only when advice has already been sought before and further advice is being provided
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when is and ROA not permissable
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if there is no previous relationship advice is a major/important decision |
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what BID steps have substeps
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2 & 5 |
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what are the safe harbour provisions |
a set of steps that identify what you would need to display that you have met the BID obligations |
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what is the purpose of a FSG
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give a potential client information about the financial services available i.e. what you do, what you charge
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purpose of an SOA
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to document the advice given and why in order to show how your client was able to make an informed decision |
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an SOA should enable _____
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an outside person to come in and see why the advice is appropriate and why those clients should act on it |
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purpose of a PDS
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when a product was recommended it is given as well and gives the client information about the products costs and risks and how it compares to other ones
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purpose of a FDS
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shows the client how much and what they have paid per year
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how is strategy implemented |
SOA will have implementation schedule attached which displays who does what and when |
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BID ultimately rests with ___________ |
Advice provider |
