Journal

Posted October 21, 2020

Posted By Meghann Cannon

Check your facts…please!

Prepared by Rosie Jervis.

The conviction of former Financial Planner Sam Henderson for charges related to dishonest conduct and defective disclosures is a reminder of the importance of fact checking all information provided to the client, both in formal advice documents and in other forms such as information disclosed on company websites or in marketing material. ASIC’s prosecution of Sam Henderson relates to statements about him holding a Master of Commerce (financial planning) which appeared on the company website and in disclosure documents, when he did not hold this qualification.

Our clients often seek advice on the legal requirements for formal advice documents like a Financial Services Guide, and whether or not advisor profiles should be included or provided in other marketing material.

A Financial Services Guide (FSG) must be up to date at the time it is given to the client or will fall foul of s 941E of the Corporations Act. This means that if your FSG or a Statement of Advice (SOA) contains information about specific advisers and their experience and education this must be accurate and up to date. 

There are also obligations to ensure that information contained in advice to the client is:

  • Worded in a clear concise and effective manner; and
  • Does not include material that is misleading or deceptive. 

When providing advice to clients, the priority is to present this clearly and with sufficient information and detail to enable retail clients to make an informed decision about whether or not to obtain financial services from a particular provider or to follow an adviser’s recommendations. This article and the prosecution of former Financial Planner Sam Henderson suggests that it doesn’t matter where you disclose this information – it must be up to date and accurate or it could give rise to dishonesty or defective disclosure offences. 

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