ASIC to focus on non-genuine ‘general advice’

Australian Financial Services License (AFSL) holders have been placed on notice by the Australian Securities and Investments Commission (ASIC) that they will not be able to inappropriately hide behind the veil of general advice.

ASIC’s focus on the use of general advice may bring superannuation funds into its ambit.

The regulator has used its latest enforcement report to make clear that financial advisers remain in its cross-hairs, notwithstanding the fact that the enforcement report outcomes suggest that issues around the provision of financial advice were not as prominent as they had been the past.

Outlining ASIC’s focus over the final six months of this financial year, the regulator said it would be looking into financial advisers’ compliance with their best interests duty and obligation to provide appropriate advice to clients along with licensees’ failure to deliver ongoing advice services to financial advice customers who are paying fees to receive those services.

The regulator said it would also be targeting “instances where licensees claim to provide general advice to retail clients during the sale of financial products (and therefore do not need to comply with the best interests duty and related obligations), but are actually providing personal advice.

The enforcement report said ASIC’s Wealth Management Project would also continue to be a focus for its enforcement activity, noting that the project seeks to improve the standards of major financial advice providers in terms of quality of advice and remediation.

“We intend to build on the significant number of investigations and surveillances we have undertaken within this project in the last six months, which have resulted in a number of key outcomes,” it said.