30th Jan AMA: I'm Phil Anderson, GM Policy, Advocacy & Standards at FAAA, Ask Me Anything!

Hi Alex. Good question. The point about an 'outcomes focussed duty' is an important one. At present the Best Interests Duty is managed and overseen by ASIC in the form of a process based duty. Almost everyone relies upon the safe harbour and this requires careful documentation of all steps taken to comply with this duty. What we want is an operating environment where advisers can rely upon their professional judgement and be assessed on the outcome, not the process that they have followed to get to that outcome.

I think that the ability to rely upon professional judgement was part of what Michelle Levy was trying to do, however she also pushed the idea of a Good Advice duty, however this was only intended to apply to NCAs. It is more critical that fully qualified advisers can rely upon their professional judgement. There was merit in the Good Advice Duty, however this is not part of the DBFO proposal.

The risk in this will be the way that ASIC oversees it and whether licensees and advisers can feel confident in operating in this environment. It is a change that we want to see, however it has to be done well, so that everyone is comfortable with the new world and we don’t end out drifting back to the old process based way of doing things.