ASIC targets misuse of ‘general advice’
Australian Financial Services license (AFSL) holders who misuse the provision of general advice to retail clients will find themselves being scrutinised by the Australian Securities and Investments Commission (ASIC).
The regulator has signalled its intention in its latest Enforcement Outcome Review report where it listed the misuse of general advice as an issue to which it would be paying particular attention over the next six months.
ASIC specifically cited “instances where AFS 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”.
Importantly, ASIC said it would also be paying particular attention to financial adviser compliance with the best interests duty and “their obligation to provide appropriate advice to clients.”
ASIC also signalled that it would be continuing the activity which gave rise to its so-called “fee for no service” report, stating that it would examining any failure by AFSLs to deliver ongoing advice services to financial advice customers who are paying fees to receive those services.
Recommended for you
Retail investment into private credit funds could surpass that of sophisticated investors, according to ASIC, but the regulator admits it is unsure how and where these individuals are first being introduced to the vehicles.
With the high cost of advice keeping young Australians locked out of advice, a fintech provider has said digital advice is key for licensees to capture this unadvised demographic.
ASIC chair Joe Longo has announced he will step down at the end of his term, departing the corporate regulator in May 2026.
When it comes to the phase-out of AT1 bonds, Schroders fixed income manager Helen Mason has urged financial advisers to sell up sooner rather than later or risk capital losses.
