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The Financial Advisers Register. What it means for consumers

in Financial Negligence by Andrew Young on

He seemed like he knew what he was talking about. Confident too. Besides, he’s backed by one of the biggest banks in Australia. You can’t get safer than that. Right?

And just like that, you’ve signed over your entire retirement nest egg to a guy you’ve met once, maybe twice.

The recent slew of financial advice scandals has underscored the need for consumers to be more vigilant and pro-active in checking up on their financial advisers, before appointing them and committing to any recommended investments.

On 31 March 2015, ASIC launched its Financial Advisers Register, which will make it easier for consumers to do this. The Register, found on the ASIC’s Moneysmart website, contains the names and key details of any person who is able to give personal financial advice in Australia.

The information on the Register currently includes:

  • the adviser’s name, registration number, status and experience
  • the adviser’s current licensee (the responsible company which holds the licence from ASIC permitting it and its representatives to give financial advice), and any previous licensees
  • what product areas the adviser can provide advice on 
  • any bans or disqualifications
  • details about who controls the licensee and any ultimate parent company

From May 2015, the Register will also include information about the adviser’s qualifications and professional association memberships.

The Register covers anyone who is allowed to give personal financial advice in Australia. Previously, you could only search for some of this information on ASIC’s website in relation to an “authorised representative” – a person who is authorised to give financial advice under a particular legislative procedure. This did not necessarily include financial advisers who were permitted to give advice because they were an employee or a director of a financial services licensee company.

The Register is also much easier to use than ASIC’s main website, requiring you only to enter a name, adviser number or ABN into a single search box.  

If you are thinking about getting financial advice, you should consider checking your adviser’s name on the Register as an absolutely essential step before committing to anything, or signing any documents. It will take you less than a minute to Google the Register, enter the adviser’s name and view the results. Any of the following should sound warning bells:

  • you cannot find the adviser’s name on the Register  
  • the adviser has a record of bans, disqualifications or other disciplinary issues
  • the adviser is not permitted to give you advice about the particular financial products you have discussed with them
  • the adviser is inexperienced or has represented many different licensees (this is not necessarily indicative of any misconduct, but you should ask why they have moved around so much).

Finally, although the risk of fines, offence provisions and loss of reputation will encourage financial advisers to provide truthful and up to date information to ASIC, there is no guarantee the information on the Register is correct.

Therefore, while the Register is a good starting point, you should not solely rely on it in deciding whether to proceed with an adviser or their recommendations. ASIC’s Moneysmart website also contains helpful guides on what to consider before proceeding with any financial advice.

Search the Register here.  

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