I am a financial adviser (authorised representative) acting for a dealer group ('A'). I am considering transferring ...

View printable version of this page

Question: 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?

Answer: Two of the central privacy considerations are:

• Openness - make sure your clients know what will happen with their records; and
• Choice - give your clients an opportunity to decide whether they want their personal information to remain with you when you move from 'A' to 'B', or whether they want their information to remain with 'A'.

The key privacy principles here are National Privacy Principle 1 (NPP 1) and NPP 10 (about the collection of individuals' personal information, including giving them notice about how you will handle their personal information), NPP 5 (about developing an easily understood privacy policy explaining in more detail how you handle personal information), and NPP 2 (about the limits on how you use and disclose personal information).

One approach, in these circumstances, is for you and/or the dealer group ('A') to write to all affected clients, telling them about your changing business circumstances. In the letter, the client would be asked whether they want their records to stay with you when you move to dealer group 'B', or whether they want them to stay with 'A'?

Once a client makes their choice, their selection is paramount. Good practice would be to make two attempts to contact clients to determine their preference, before the change in business circumstances. In some circumstances it maybe necessary to place a public notice in the local press to advise the community about the financial adviser's changing circumstances.

This approach must include making clear and explicit to clients what will happen to their personal information if they do not respond. For example, clients could be advised that if they do not respond, their records would transfer with you to dealer group 'B' when you move. In this case, dealer group 'B' would also need to contact the client, in a manner consistent with NPP 1 (and NPP 10, where necessary), if it intends to collect their personal information. Alternatively, if you and dealer group 'A' have clearly communicated with the client about different arrangements, which they could reasonably expect to take effect, then the NPPs would, for instance, allow the client's records to remain with 'A' when you move.

It is vital that in all communications the client is clearly told how and where they can express their views and choices, and also where they can get more information from (eg. a toll free number). The Guidelines to the National Privacy Principles provide further information on the circumstances where failure to act can constitute consent - see the Guidelines on NPP 2.1(b).

Authorised Representatives and Dealer Groups must also abide by their other legal obligations when considering changing business circumstances. Fulfilling your privacy obligations does not obviate other obligations you may have, such as in legislation or in contract, including where these obligations may place limits on your plans to change business circumstances. Moreover, clients may also have a right to advice and information on other matters than privacy, in these circumstances, including the financial implications for them of changes in your business circumstances.

The Privacy Act and its principles are not intended to resolve proprietary or market issues. The Act and its principles set out organisations' privacy obligations when handling personal information in their given business circumstances.