ASIC's new rules on financial services advertising
The Australian Securities and Investments Commission (ASIC) has tightened up the guidelines around financial services advertising at the same time as revealing it has taken action against 117 advertisements since July, 2010.
However in tightening up the advertising guidelines, the regulator has allowed publishers in the financial services area the defence of not necessarily being expert in understanding the financial services products their publications advertise.
The release of the ASIC guidance also comes amid a recent response to questions on notice during Senate Estimates dealing with the Industry Super Network's 'compare the pair' advertising campaign, in which the regulator said it was not in a position to comment on "operational matters".
In releasing ASIC's new guidance around financial products and services advertising, ASIC commissioner Peter Kell said advertisements that did not accurately represent the financial product, key features and risks or the nature and scope of financial advice, could create unrealistic expectations that led to poor financial decisions.
"It is important that ads are clear, accurate and balanced, especially when consumers are looking for lower risk products in an uncertain global financial environment," he said.
Much of ASIC's approach to financial services advertising is revealed in its responses to the nearly 40 submissions filed with it by industry organisations and participants, not least on issues of whether the advertising was actually intended to help consumers make appropriate decisions.
The ASIC response document reveals the degree to which the regulator modified its approach based on the realities of industry practice.
In releasing the guidance, Kell felt the need to remind promoters of financial products and financial advice services, and publishers of such products and services, that the regulator would be regularly reviewing the advertisements.
"ASIC's guidance will help industry participants understand their obligations," he said. However, ASIC is also sending a message that we will take a strong response to misleading advertisements."
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