IFA-Aust has created the following two CSA No Advice Execution Only templates, which can be downloaded from the Templates & Forms/Templates page HERE:
Client Service Agreement - No Advice Execution Only (Insurance)
Client Service Agreement - No Advice Execution Only (Investment)
These Execution Only client service agreements should be used in the event your client has asked you to facilitate a financial transaction on their behalf but has expressly directed that they do not want any recommendations or advice from you about that transaction. Some scenarios where this might apply would be if your client has decided they would like you to arrange the placement, increase or cancellation of insurance, or the purchase or sale of shares.
The following ASIC publications have led us to the view that setting up SMSF by execution only would not comply with the relevant conduct and disclosure obligations, so it is important to note that we do not allow execution only SMSF setup.
https://asic.gov.au/regulatory-resources/financial-services/giving-financial-product- advice/advice-on-self-managed-superannuation-funds-disclosure-of-costs/
To consider whether an execution only CSA is appropriate, you cannot have provided either personal or general advice in any way to the client in relation to the product or transaction. You should think about whether you have directly or indirectly influenced your client in relation to the transaction. Some situations which would constitute influence or would be considered providing advice would be:
You gave your opinion about a particular product and your client decided they would like to invest in that product.
A client has said they want to withdraw funds from their portfolio but have asked you which part of the portfolio the withdrawal should come from.
The client wants to contribute to super but has asked you to work out whether they will go over their cap.
If you believe the client may not fully understand the consequences of, or there are alternatives to, the proposed transaction and continues to decline personal advice you should refuse to provide execution-only services. For example, if your client has asked you to cancel their income protection because it’s too expensive but you know there could be ways to reduce the premium, that would constitute a client not understanding that there are alternatives to cancelling the product. Similarly, if a client has asked you to close their super and roll proceeds into another super fund, and the current fund contains a life insurance component but the new fund doesn’t, that might be an example of the client not understanding the consequences.
If you are satisfied that an execution only CSA is acceptable you must ensure:
The CSA is signed BEFORE you start the transaction;
The client receives an FSG;
You classify the client and transaction in relation to your AML/CTF responsibilities; and
You prepare a detailed file note outlining the circumstances, including your reasoning as to why execution only is appropriate.
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