The definition of personal advice and the treatment of platform operators in the design and distribution obligations legislation must be clarified, the Financial Services Council has argued in its submission.
When financial advisers use a platform to implement personal advice for a client, the platform operator should be excluded from design and distribution obligations, the lobby group argues.
The current draft legislation gives "associates" of such financial advisers some relief from the requirements by listing them as "excluded dealings".
However, platform operators are not recognised as "associates".
The FSC is asking for the Corporations Act to be amended (or a regulation) to broaden the definition of excluded conduct to include such situations.
"A large proportion of retail financial products are held via platforms where advice is provided by a third party entity which is not an associate of the platform provider," the FSC said in its submission published on October 29.
"Similarly, financial advice dealer groups and financial advisory intermediaries are a common distribution channel for financial products to be directly distributed to retail clients."
Personal advice definition
The FSC also thinks DDO's amendment to the definition of "personal advice" does not go far enough.
Under current definition of personal advice in DDO, product issuers and distributors are exempt from DDO when they 'ask investor for information' in determining if they are a target market or 'inform' them.
But not when they 'consider' this information received from the investor.
FSC wants the 'consideration' element to be included in the exemption so that: "Personal advice is not given or directed to a person (including by electronic means) to the extent that the provider of the advice has considered one or more of the person's objectives, financial situation or needs in performing, or seeking to perform, one or more obligations imposed on the provider pursuant to Part 7.8A."