ASIC imposes specific record-keeping requirements on Australian Financial Services (AFS) licensees and representatives of AFS Licensees (“the Providers”) that provide personal advice to retail clients under the Corporations Act 2001.
ASIC requires AFS Licensees who provide personal advice to retail clients to keep records for a period of at least seven (7) years after the day advice was provided to the client to comply with best interests duty and related obligations.
The Providers must ensure the following records are kept:
Records are to be kept for seven (7) years after the day the personal advice was provided to the client and should be accessible by the AFS Licensee during that period. The obligation to retain these records continues to apply, even where the AFS Licensee ceases to be licensed.
Where the provider of the personal advice is an authorised representative and the authorised representative is responsible for keeping records, the authorised representative must provide the records to the AFS Licensee upon request, where the request is made for the purposes of comply with the recording keeping obligations within 7 years after the day on which the personal advice was provided to the client.
These obligations continue to apply even if the authorised representative ceases to be an authorised representative of the AFS licensee during the period that the records are required to be given or kept.
These obligations are designed to address licensees’ concerns that the authorised representatives may not cooperate with a licensee’s request to access documents after they ceased the role.
The record-keeping obligations do not apply to the provision of personal advice where the Providers satisfy the duty in subsection 961B(1) if the Providers take the steps under section 961B(2)(a), (b) and (c).
Under the original Class Order 14/923, AFS Licensees experienced difficulties where an authorised representative moved to another licensee and the first licensee is unable to review the advice due to the lack of access to the records. This is particularly pertinent where a complaint is made to the first licensee about a former authorised representative.
Class Order 14/923 expired in September 2024. ASIC then converted the original Class Order 14/923 to the legislative instrument format – ASIC Corporations (Record-Keeping Requirements for Australian Financial Services Licensees when Giving Personal Advice) Instrument 2024/508, effective on 23 September 2024.
ASIC considers it important for AFS licensees to keep records of personal advice provided to clients by the licensee or its representatives to ensure the ongoing provision of quality advice and consumer confidence. It also assists the Australian Financial Complaints Authority (“AFCA”), to resolve disputes between clients and the licensee or their representatives through reviewing records kept by the license.
Please contact us if you require assistance with understanding the record keeping obligations.
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