AFSL Quality of Advice Remediation Reviews

An AFSL (Australian Financial Services Licensee) quality of advice remediation review is a comprehensive process that aims to identify and remediate instances where an AFSL has provided advice that did not meet the required standards of appropriateness and best interests for their customers.

The key activities we undertake as part of an AFSL quality of advice remediation review include:

• Conducting a thorough review of the AFSL's advice processes, procedures, and documentation to identify any instances where advice may not have been appropriate or in the best interests of the customer.

• Undertaking a comprehensive review of customer files to identify any instances where advice may not have been appropriate or in the best interests of the customer.

• Developing and implementing a remediation plan that addresses any identified issues, including compensating customers for any losses or impacts resulting from the inappropriate advice.

• Providing ongoing support and monitoring to ensure that the AFSL is meeting their obligations and providing appropriate advice to their customers going forward.

• Support engagement strategy with regulators and other stakeholders to ensure that the remediation process is transparent and effective in addressing any issues identified.

An AFSL quality of advice remediation review is a critical process that helps to ensure that customers receive appropriate and ethical advice from their financial services providers, and that any instances of inappropriate advice are identified and remediated in a timely and effective manner.

As part of undertaking a comprehensive review of customer files to identify any instances where advice may not have been appropriate or in the best interests of the customer, we will conduct specific tests while taking into consideration the safe harbour provisions under the Corporations Act 2001. 

These tests include:

1. Suitability Test

We will review whether the advice provided to the customer was suitable for their individual financial situation and needs, taking into account factors such as their investment objectives, risk tolerance, and financial circumstances.

2. Best Interests Duty Test

We will evaluate whether the advice provided was in the best interests of the customer at the time it was given, based on their individual circumstances and needs.

3. Adequacy Test

We will assess whether the advice provided was adequate for the customer's needs and whether they were provided with sufficient information to make informed decisions about their financial investments.

4. Appropriateness Test

We will review whether the advice provided was appropriate for the customer, based on their financial knowledge, experience, and objectives.

5. Disclosure Test

We will evaluate whether the AFSL provided appropriate disclosures to the customer, including information about fees, commissions, and any conflicts of interest that may have influenced the advice provided.

6. Record-Keeping Test

We will review whether the AFSL kept adequate records of the advice provided to the customer, including the rationale for the advice given and any communication or correspondence with the customer.

By conducting these specific tests, we can thoroughly evaluate each customer file to identify any instances where the advice provided may not have been appropriate or in the best interests of the customer.