The Corporations Act 2001 (Cth) requires that those providing financial product advice issue clients with a Financial Services Guide (FSG). In particular, the Financial Services Guide provides a useful structure for the presentation of advice.
The structure comprises six key areas as follows.
While each person in the property investment advice business may be qualified to provide advice, they may be a representative of the business owner. A discussion about this can help clients understand the relationship between themselves and the business owner and paint a picture of the background and experience of the business and establish their professional credentials.
The person providing the advice
If you are not the business owner, you have the opportunity to explain your qualifications, achievements and any other features that distinguish you and the advice you provide to your clients.
Services being offered
This is the point at which you highlight any restrictions placed on the advice you can give and/or point to any areas of specialisation that may be of interest to your clients and this can be used to demonstrate what additional help you may be able to offer.
Fees for service
This section provides the opportunity to explain the charges for services, whether fixed or a percentage commission on sale, and to explain any other costs a client will incur, such as advertising, and explain how and when they will be expected to pay them.
Client rights in the advice process
A range of issues will need to be discussed such as:
- Can you work with limited information or do you need full disclosure of all aspects of their situation?
- Are clients required to have finance in place before dealing with you or can this be arranged at a later date or even through the advisor?
- Is there a cooling-off period and can they provide for a conditional purchase?
Is there an internal complaints procedure and what procedures are in place with an industry body?
You are advised to have a formal complaints handling procedure and hand a written document to your client at your very first meeting which outlines just what this is. This will assist you to remain transparent and clients appreciate this. You should also be a member of an external complaints resolution scheme, so that if your client is not satisfied with your services and the subsequent way you have managed their complaint, they can be referred to this external provider.