FSG relief – what’s in it for me?

From 10 July 2024, advice licensees and their corporate authorised representatives (CARs) and Authorised Representatives (ARs) have been able to take advantage of modest relief in relation to Financial Services Guides (FSGs).

Reason for reform

As part of her review, Ms Levy recommended that providers of personal advice either continue to give each client an FSG or make information publicly available on their website about remuneration, benefits, and internal and external dispute resolution procedures.

Pre-existing methods of providing an FSG

This was probably the least consequential amendment brought in by the DBFO Act.  Currently, a licensee, CAR or AR, when required to provide an FSG to a retail client, may provide it by a range of methods.  These include by:

• making it available to the client in a manner agreed between the client and the licensee, CAR or AR;[i] or
• publishing it digitally and notifying the client that the disclosure is available, provided that the client is first given the opportunity to opt out of this method of delivery.[ii]

Providing website disclosure information in place of an FSG

When this amendment was first introduced, an entity (whether a licensee, CAR or AR)[iii] providing financial product advice (whether personal or general advice) to a retail client did not have to provide that client with an FSG if it instead disclosed certain information on its website.[iv]  This ‘relief’ still exists but the situations in which it can be used have been expanded.  The relevant information is known as ‘website disclosure information’.

Website disclosure information means (and this may surprise you) all the information that would be required to be in the FSG except… the title![v]  The website disclosure information must be readily accessible to the public and must be kept up to date.  There is no obligation give this information the title ‘website disclosure information’.

In practical terms, we expect that most licensees, CARs and ARs will take advantage of this reform by publishing their FSG in a prominent spot on their website (which they possibly already do).  The difference between the new requirement and the old requirement (which will continue to operate as an alternative to the new one) is that the new requirement does not require the licensee, CAR or AR to actively notify the client that the FSG is available on its website, does not require the licensee, CAR or AR to get the client to agree to receiving the FSG by accessing it on the licensee’s, CAR’s or AR’s website and does not require the licensee, CAR or AR to give the client an opportunity to opt out of receiving the FSG that way.

The fine print

Like many things in life, there was some fine print here.  When these amendments were originally inserted, a licensee, CAR or AR could only take advantage of the new provisions if the only financial service being provided was financial product advice (whether general or personal) to a retail client.  It did not apply to any other financial service, even one resulting from that advice.

Remember that an FSG is already not required anyway, if the only financial product advice provided is general advice provided to the public – at an event, in a broadcast, or distributed or displayed as promotional material.[vi]  This is where most general advice is likely to be provided (although some licensees, CARs or ARs may provide a research and recommendation service on a general advice model, for a fee).

For all other financial services, the pre-existing regime applied.  Many advice licensees and their CARs and ARs who dealt in financial products (either through execution only services or following the provision of personal advice) and others who provided other services such as claims handling and settling in relation to insurance were required to provide the FSG to their client the normal way as these financial services were not subject to the website disclosure exemption.

This meant that many advice licensees and their CARs and ARs found little practical benefit in relying on the available exemption and opted to rely on their pre-existing process of providing the client with an FSG prior to providing them with any financial product advice or other financial service.

The finer print

Eventually, the Government and ASIC realised that perhaps the available exemption was rather limited in practical effect and so, in accordance with its discretionary power, ASIC amended the law.[vii] The amendment expanded the set of circumstances in which an advice licensee, CAR or AR can rely on the exemption from having to provide a client with an FSG by publishing compliant website disclosure information on their website to include not only the circumstance where they provide the client with financial product advice (both general and personal) but, now, to also include in the circumstance where the licensee, CAR or AR deals in a financial product for the purpose of implementing the advice they provided to the client.

The bottom line

The FSG relief is now useful in situations where a licensee, CAR or AR provides financial product advice to a retail client and then goes on to deal in a financial product for the purpose of implementing that advice.  However, be careful.  Dealing that is not preceded by the provision of advice (typically called ‘execution only’ services) and other financial services, such as claims handling and settling, are not covered by the relief (whether or not they are preceded by advice) and will still require you to provide the FSG the usual way.

Author: Samantha Hills (Partner)

Would you like to know more?

[i] Section 940C(1)(a)(iii) of the Corporations Act 2001.

[ii] ASIC Corporations (Facilitating Electronic Delivery of Financial Services Disclosure) Instrument 2015/647 section 5(2).

[iii] In the case where the website disclosure information is made available by a CAR or AR, this must be authorised by the licensee.  Section 943H of the Corporations Act 2001.

[iv] Note: Iif the obligation to provide an FSG would apply to the licensee, the information must be available on the licensee’s website.  If the obligation to provide an FSG would apply to the CAR or AR, the information must be available on the CAR’s/AR’s website.

[v] Section 943J of the Corporations Act 2001.

[vi] Section 941C(4) of the Corporations Act 2001 and regulation 7.7.02(2) of the Corporations Regulations 2001.

[vii] ASIC Corporations (Amendment) Instrument 2024/809.