When discussing the causes of some of the poor-quality advice being exposed during the Royal Commission, Catalyst Compliance director Peter Cashel said part of the issue is that many advisers and licensees have no understanding of the laws that bind them and their profession.
Specifically, he referred to ASIC’s RG175 Licensing: Financial product advisers—Conduct and disclosure, which governs how advisers should recommend financial products.
“Nobody expects advisers to read the entire Corporations Act,” Cashel said. “That’s our job. But what ASIC does do is produce regulatory guides. And they should be your Bible.”
Cashel said he was “astounded by how many advisers and licensees haven’t actually read it,” because the conflicts priority rule contained in RG175 spells out, clear as day, the circumstances in which advice could be considered conflicted in a non-permissible way.
Stand on the word
Cashel said the conflicts priority rule “tells you exactly how to manage conflicts of interest. So if
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