The Australian Securities and Investments Commission (ASIC) has acted to renew the class order relief it has provided with respect to general advice.
Amid continuing industry discussion, including in the Financial System Inquiry, about the relabelling of general advice, ASIC has moved to extend the class orders with little or no amendment to their existing provisions.
The regulator has started to move on the issue because the existing legislative instruments are about to expire.
Explaining its rationale, ASIC said it had originally provided the relief “because the full recital of the general advice warning may not be appropriate in all circumstances when giving general advice”.
In doing so, it acknowledged suggestions that “retail clients do not understand or do not listen to the full general advice warning when it is given orally and concerns that “giving the full general advice warning orally increases the time required to deal with oral inquiries and so increases costs for general advice providers”.
It said the relief was beneficial to advice providers and retail clients because it allowed general advice providers to give a shorter, simpler general advice warning when they provide oral general advice.
“The modification is intended to make the warning more easily understood by retail clients and to reduce the regulatory burden on general advice providers and their representatives,” the ASIC documentation said. “Advice providers may also use their own words to convey the simpler warning.”
