The Association of Investment Brokers and Advisors (SIAA) has warned the Albanian government that the “buy”, “sell” and “hold” recommendations issued by brokers and investment banks could fall victim to the revision proposed by the Treasury of Financial Advice Acts.
The Treasury Board Quality Review in August offered 12 recommendations to ease the regulatory burden on financial planners and investment dealers and improve consumer access to advice in an interim report covered for the first time by The Australian Financial Review.
Among them was a proposal to scrap “general advice” – a controversial concept under which licensed advisers can recommend financial products such as stocks and bonds without considering a client’s personal circumstances.
If implemented, all financial advice would be ‘personal’, although there would be less paperwork and compliance requirements in place.
“Under the proposals, it appears that broker research disseminated to clients may fall into the category of personal advice,” the SIAA wrote in its submission to the QAR, chaired by Allens’ partner Michelle Levy.
“This should not be an expected result of the proposals. Factoring broker research into the definition of personal advice would lead to a number of unintended and undesirable consequences that will negatively impact consumers.
Treating broker research as “personal advice” would either mean that the cost of research subscription would increase significantly, or that brokers would have to stop making stock recommendations to clients outside of one-to-one advisory relationships, said the pressure group.
Levy’s review is expected to issue a final report by December 16.
