ASIC simplifies general advice warnings
In a move designed to help clarify some of the confusion surrounding the provision of general and personal advice regarding corporate superannuation, the Australian Securities and Investments Commission (ASIC) has issued a relief order allowing advisers to offer shorter and simpler warnings to their clients when providing general advice orally.
Under the relief order CO 05/1195 ‘Simplified warning for oral general advice’, advisers will have been deemed to have given sufficient warning to the client by making simple statements such as ‘This advice is general, it may not be right for you’, or ‘This advice is not tailored, so you can’t assume it will be suitable for you’, once, in any advice-related conversation, be it over the telephone or face-to-face.
The relief order was issued to lessen the likelihood that a retail client would act on general advice received in the mistaken belief it was advice of a personal nature.
“By focusing on the core message of the general advice warning, this relief makes it easier for retail clients to understand the warning when it is given orally, as well as reducing the regulatory burden on general advice providers,” ASIC director of policy and research Mark Adams said.
“General advice providers are not required to use the words used in the class order, but can develop their own words to convey the simpler warning. It would be good practice to consider the needs of your audience when deciding what words to use,” Adams added.
The move comes after Money Management recently reported that advisers had concerns over giving superannuation advice, saying they were unsure over the type of advice they were allowed to provide to fund members, and as such were seeking further guidance from the regulator.
The announcement also comes after ASIC signalled its intentions to increase scrutiny of super advisers recommending a switch from corporate super to commercial master trusts for fund members.
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