ASIC today released guidance to help promoters comply with their legal obligations when advertising financial products and services.
RG 234 Advertising financial products and advice services: Good practice guidance (RG 234) builds on ASIC’s focus to promote confident and informed investors and financial consumers.
‘Ads that do not accurately represent the financial product or its key features and risks, or the nature and scope of financial advice, can create unrealistic expectations that lead to poor financial decisions,’ ASIC Commissioner Peter Kell said.
‘It is important that ads are clear, accurate and balanced, especially when consumers are looking for lower risk products in an uncertain global financial environment.’
Mr Kell reminded promoters of financial products and financial advice services and publishers of advertising for these products and services that ASIC will be regularly reviewing ads.
‘ASIC’s guidance will help industry participants understand their obligations. However, ASIC is also sending a message that we will take a strong response to misleading ads,’ Mr Kell said.
Since July 2010, ASIC’s actions have resulted in 117 advertisements across the financial services sector being withdrawn or remedied in response to concerns about poor practices and potentially misleading or deceptive conduct.
‘The outcomes we will aim for when confronted with suspected breaches will involve potentially stronger penalties than we have sought in the past.’ Mr Kell said. Powers at ASIC’s disposal include issuing stop orders and public warning notices, and seeking civil pecuniary penalties.
ASIC’s final guidance on ads responds to feedback received on Consultation Paper 167 Advertising financial products and advice services: Good practice guidance (CP 167).
ASIC’s guidance also contains real examples of where we have raised concerns with promoters and as a result the ad has been changed.
Regulatory Guide 234 Advertising financial products and advice services: Good practice guidance (RG 234)
Report 278 Response to submissions on CP 167 Advertising financial products and service (REP 278)
Consultation Paper 167 Advertising financial products and advice services: Good practice guidance (CP 167).