ASIC cracks down on misleading accounts
The Australian Securities and Investments Commission (ASIC) has moved to stamp out misleading terminology that has led some pensioners to believe they are earning a higher interest on standard savings accounts.
Several institutions have been using the term ‘deeming account' to describe basic savings accounts, when the term should only apply to an account that accrues a set rate of interest in line with the government scheme, according to ASIC.
The way the accounts are marketed suggests an untrue correlation between the savings accounts and Government's social security income test deeming rules, ASIC said.
"Special care should be taken when using terms which will have a particular connotation to consumers, to ensure that the product characteristics are consistent with the representations inherent in the product name," ASIC deputy chairman Peter Kell said.
The regulator said the word ‘deeming' should not be used unless there is a direct correlation to the government scheme, while assertions that the accounts are ‘comparable to', ‘compatible with', ‘guided by' or ‘reflective of' the deeming initiative should be removed as well, unless the connection is verifiable.
Recommended for you
Shaw and Partners’ new national head of private wealth believes the biggest challenge for financial advisers right now is being able to deliver efficient advice delivery amid a complex regulatory environment and growing investment universe.
Global equity manager Orbis Investments has appointed a head of marketing from Capital Group as it becomes the latest manager to target advised retail investors.
While Australia prepares for the $3.5 trillion intergenerational wealth transfer, a Wilsons Advisory report suggests the ongoing gender imbalance in the advice profession could prove a challenge to this process.
Danielle Press, a former ASIC commissioner, is to chair a new AFSL committee set up by Sequoia which seeks to improve governance practices and review its approved product lists.
