Best Interests Duty

The statutory obligation on financial advisers to act in the best interests of their retail clients when providing personal advice.

Introduced by the Future of Financial Advice (FoFA) reforms and codified in section 961B of the Corporations Act, the Best Interests Duty requires advisers to take reasonable steps to satisfy a defined "safe-harbour" process — identifying the client’s objectives, financial situation and needs; investigating and considering products that could meet those needs; basing the advice on that investigation; and only providing advice if it is reasonably likely to achieve the client’s objectives. Related obligations include the appropriate-advice duty (s961G) and the priority-of-client duty (s961J).