To help you undertake reasonable inquiries, document a client’s current financial position and to help identify a client’s relevant circumstances, we have developed the Client Fact Find document. The Client Fact Find can be found in the Advice Document Library on Xplan and must be used as it contains appropriate fields to capture relevant information applicable to the goals, objectives and scope of advice being sought by the client. It is crucial that you complete the fact find in full to ensure that you are able to support the advice you are providing.
To view a video guide on the Fact Finding and Client Introductions Process click here and here
As an advice provider you have a responsibility to understand your client’s goals, objectives, financial situation and to determine the subject matter for the advice being sought. These facts are referred to in legislation as the client’s relevant circumstances and will support the basis for your recommendations. This document can be used to record information that is relevant to the advice sought by your client/s and, when completed appropriately, can be used to confirm the Terms of Engagement as required by APES 305.
The best interests duty and related obligations require advice providers, when providing personal advice to retail clients, to:
Act in the best interests of their clients (s961B);
Provide appropriate advice (s961G);
Warn the client if advice is based on incomplete or inaccurate information (s961H); and,
Prioritise the interests of the client to comply with the ‘conflicts priority rule’ (s961J).
Detailed completion of the Fact Find will support your obligation to act in the client’s best interests by providing a record that clearly demonstrates you have made reasonable inquiries to satisfy certain elements of the Safe Harbour requirements. For example, a thoroughly completed fact find, together with detailed file notes of your discussions with a client will show that you have:
This process will also help you identify what areas of advice (subject matter) you can support, any financial product advice that may be required and what other steps may be required to fully consider what may be in the client’s best interests. You can also identify through these discussions those areas of advice you may not be authorised to advise on and those which may require you to refer your client/s to another subject matter expert.
For more information on this topic, the Professional Standards team will be running a webinar series looking at the main aspects of the financial planning process to help you better understand the legal obligations while still helping you identify opportunities that will support the growth of your financial planning business.
Please refer to the Fact Finding and Other Investigations – Licensee Standard document, available in the Compliance Document Library on Xplan. To better understand the legal framework and expectations of the regulator when providing personal financial advice in Australia, we encourage you to download, read and understand ASIC’s Regulatory Guide 175; Licensing: Financial product advisers - Conduct and disclosure.
Once you have collected information on your clients and documented it in the fact find, this will need to be saved against the relevant client within Xplan. This allows for the maintenance of data integrity but also allows us to verify that the advice you have provided is in the best interests of the client.