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22. Annex Three: Disclosure Requirements


Financial Intermediaries: Discussion Document

Regulatory and Competition Policy Branch
[ Last Updated 4 July 2006 ]


Recommended disclosure requirements Information only function Execution only function Product marketer function [High Level] adviser function
Experience Yes
Qualifications Yes
Membership of professional bodies Yes
Nature and scope of any professional indemnity insurance Yes
Whether dispute resolution facilities are available to consumers Yes Yes Yes
In the previous five years before the service is provided:
  • relevant convictions
Yes Yes Yes
  • whether the adviser has been adjudicated bankrupt
Yes Yes Yes
  • prohibitions from managing a company or business
Yes Yes Yes
  • any successful court action taken against the financial intermediary in the intermediary's professional or business capacity
Yes Yes Yes
  • whether the intermediary has been expelled from or prohibited from being a member of a professional body
Yes Yes Yes
The nature and level of the fee the intermediary will charge (if any) Yes Yes Yes Yes
Other interests and relationships reasonably likely to influence the intermediary in performing their function, such as relevant remuneration received from someone other than the consumer, and the amount or rate of remuneration Yes Yes
Details of the types of products about which the intermediary gives advice or markets and, if the intermediary only advises or markets in relation to products of a particular product generator or generators, a statement to that effect and the name of each of those product generators Yes Yes
Disclosure in dollar terms, on a periodic basis, of the difference between the aggregate gross returns on all investments organised though the financial intermediary, and the actual net return received by the consumer, with an explanation of the difference Yes Yes
To the extent practicable, total benefits to the intermediary of the consumer's business (including "soft dollar" benefits) where those benefits are not already disclosed as part of the actual gross and net gross return disclosure above Yes Yes
The role being undertaken by the intermediary, including a statement as to whose interests the intermediary is acting in and a description of those interests, and for product marketers, a "health warning" about the limitations in the information provided (for example, "I have not considered your personal circumstances, and accordingly, the product may not suit your needs") Yes Yes
Remuneration options, if any (that is, hourly rate, fee only, commission rebate) and whether any components of the remuneration are variable Yes Yes Yes Yes
Where advice or marketing relates to switching products, disclosure of remuneration to the intermediary, the cost to the client (for example, exit fees, entry fees and implementation fees), and the benefits of the alternative as against the existing product Yes Yes Yes

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