8/10/03

The Office of the Privacy Commissioner has today released a Frequently Asked Question (FAQ) regarding the privacy obligations that financial advisors have when they choose to transfer between financial dealer groups.

"Customers wishes must come first when financial advisers consider what to do with clients' personal information when the advisers move from one financial dealer group to another," said Privacy Commissioner, Malcolm Crompton.

"It's very important to ensure that clients (the individual receiving advice) know what is happening with their personal information and that they are given a clear and up-front choice about what they want done with their personal information.

"Where a client doesn't clearly indicate what they want done with their personal information, the advice to them should clearly spell out what will happen to that information if they take no action.

"For example, the advice to the client could be that their personal information will stay with the original financial dealer group. Alternatively the advice could be that their information will be transferred when their financial advisor moves to a new firm.

"Authorised representatives and dealer groups need to fully explain what happens to clients' data and this is best done early in the relationship between organisation and individual.

"It's the Office's view that organisations should make at least two attempts to contact all clients. Two contacts would demonstrate, in most instances, that a reasonable effort has been made to seek the client's express views.

"The FAQ is guidance for the sector, it is not law or a ruling. It is guidance to assist the sector in applying the law, in this case the National Privacy Principles in the Privacy Act, in their circumstances with their particular clients.

"This advice helps organisations deal with their privacy responsibilities and does not remove authorised representatives or dealer groups' other legal obligations, under corporations law or arising from contracts they are party to. The FAQ does not change these organisations other responsibilities to clients."

For more details please refer to the FAQ: I am a financial adviser (authorised representative) acting for a dealer group ('A'). I am considering transferring to another dealer group ('B'). What are the key privacy obligations towards clients to whom I provide advice?