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ASIC good practice guide on advertising financial products and advice services

Posted By David Jacobson On February 15, 2012 @ 7:50 am In Compliance,Corporations Act,Financial Services,Funds,Insurance,Investments,Marketing,Superannuation | Comments Disabled

ASIC has released RG 234 Advertising financial products and advice services: Good practice guidance (RG 234 [1]) setting out its views on the obligations of financial service providers to not make false or misleading statements or engage in misleading or deceptive conduct under the Corporations Act and the ASIC Act.

Who it applies to
ASIC's guidance applies to:
• promoters of financial products and financial advice services. The promoter will sometimes be the product issuer, but can also be a third party such as a financial adviser, distributor or agent; and
• publishers of promotions about financial products and financial advice services.

Promoters who hold an AFS licence must comply with the ASIC Act to meet their obligation to comply with financial services laws: s912A(1)(c).

What products it applies to
ASIC's guidance applies to all types of financial products, including:
• investment products;
• risk products;
• non-cash payment facilities; and
• credit facilities.

Although references to ‘financial products’ in this guide mean financial products as defined in the Australian Securities and Investments Commission Act 2001 (ASIC Act) and therefore include credit facilities (see s12BAA, ASIC Act) the guide focuses primarily on advertising of investment and risk products and financial advice services. Different considerations apply for advertising of credit products and services, and ASIC plans to issue additional guidance for credit providers and credit service providers under the National Consumer Credit Protection Act 2009 (National Credit Act).

The good practice guidance also applies to advertising of both general and personal financial product advice. References to ‘financial advice services’ in the guide mean the provision of financial product advice as defined in the ASIC Act: see s12BAB(5).

What the guidance covers
The guidance covers:
• the nature of the product;
• returns, benefits and risks;
• warnings, disclaimers, qualifications and fine print;
• fees and costs;
• comparisons;
• past performance and forecasts;
• use of certain terms and phrases (e.g. ‘free’, ‘secure’ and ‘guaranteed’);
• the advertisement’s target audience;
• consistency with disclosure documents;
• photographs, diagrams, images and examples; and
• the nature and scope of advice.

What media it applies to
It applies to advertising communicated through any medium in any form, including:
(a) magazines and newspapers;
(b) radio and television;
(c) outdoor advertising, including billboards, signs at public venues, and transit advertising;
(d) the internet, including webpages, banner advertisements, video streaming (e.g. YouTube), and social networking and microblogging (e.g. Twitter);
(e) social media and internet discussion sites;
(f) product brochures and promotional fact sheets;
(g) direct mail (e.g. by post, facsimile or email);
(h) telemarketing activities and audio messages for telephone callers on hold; and
(i) presentations to groups of people, seminars and advertorials.


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URL to article: http://www.langes.com.au/australian_regulatory_compliance/2012/02/15/asic-good-practice-guide-on-advertising-financial-products-and-advice-services/

URLs in this post:

[1] RG 234: http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/rg234-published-14-February-2012.pdf/$file/rg234-published-14-February-2012.pdf

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