Brokers have been urged to be careful about using the word “independent” after the Australian Securities and Investments Commission (ASIC) rebuked four financial advice firms for misleading consumers.
ASIC told the four firms to “cease and amend” false claims of independence on their websites.
The issue of intermediaries claiming to be independent is regularly raised by ASIC, and National Insurance Brokers Association CEO Dallas Booth says the latest warning “is a really timely reminder”.
“The language is regulated and people do need to be careful if they are going to use some of these words,” he told insuranceNEWS.com.au.
“The same obligations apply to insurance brokers.”
The regulator last year released guidance to clarify that terms such as “independently owned” and “independent” are restricted under the Corporations Act unless conditions are satisfied.
Directives to make changes were given to Financial Spectrum (authorised representative of Spectrum Wealth Advisers; James Gerrard (AR of Australian Financial Advisory Group); PWK Private Wealth Advisers (AR of Paragem) and Debbie Hudson Financial Services (trading as Wealth Fusion and an AR of Paragem).
ASIC says it will continue to publicly name advisers who do not comply with their obligations.
“Enforcing transparency and accuracy in disclosure are important components in ASIC’s ongoing work to improve standards in the financial advice industry,” the regulator said.