ASIC to review marketing and disclosure practices in term deposit space
The Australian Securities and Investments Commission (ASIC) is planning to undertake a review of marketing and disclosure practices in the term deposit market as investors continue to rush into this space.
Term deposits in authorised deposit-taking institutions (ADIs) grew by almost 40 per cent from June 2007 to September 2008, with ASIC estimating that total term deposits in ADIs now exceed $500 billion. This makes them one of the most heavily used investments, the regulator said.
ASIC chairman Tony D’Aloisio said the growth in ADI deposits, primarily term deposits, had been driven by the safety offered by the Commonwealth Government bank guarantee.
In what it calls a ‘health check’ of the area, ASIC will conduct a review of marketing and disclosure associated with term deposits. ASIC chairman Tony D’Aloisio said the review is expected to be completed by the end of May this year.
But D’Aloisio said investors and consumers “should continue to have confidence in term deposits with ADIs”.
“Our review is simply a ‘health check’ to ensure that investors and consumers can make properly-informed decisions when choosing to make term deposits or roll over existing deposits,” D’Aloisio said.
ASIC has also released a new guide on term deposits for investors. The regulator will update the investor and consumer guide based on the findings of the review and issue additional guidance as necessary, its statement said.
The new guide appears on ASIC’s investor and consumer website, FIDO.
In May last year ASIC released a guide for investors around margin lending – not long before the share market crash led large numbers of investors into margin call territory and possibly around the same time as the regulator was receiving complaints about groups such as Storm Financial, whose margin lending advice has left its former clients stranded.
Recommended for you
Net cash flow on AMP’s platforms saw a substantial jump in the last quarter to $740 million, while its new digital advice offering boosted flows to superannuation and investment.
Insignia Financial has provided an update on the status of its private equity bidders as an initial six-week due diligence period comes to an end.
A judge has detailed how individuals lent as much as $1.1 million each to former financial adviser Anthony Del Vecchio, only learning when they contacted his employer that nothing had ever been invested.
Having rejected the possibility of an IPO, Mason Stevens’ CEO details why the wealth platform went down the PE route and how it intends to accelerate its growth ambitions in financial advice.
