The Stockbrokers and Investments Advisers Association (SIAA) has defended the title of ‘general advice’ and refuted suggestions it should be changed to ‘information’.
In its submission to the Quality of Advice review, SIAA said re-labelling general advice as ‘information’ failed to take into account the fact that it must contain a recommendation or opinion and that general advice was an important part of the advice spectrum.
“Further clarity in the law is needed on the line between both personal and general advice on the one hand and what constitutes factual information on the other.”
This was particularly relevant for SIAA’s members as it would affect their production of research reports on listed securities, which were currently classed as general advice, and there were concerns investors would dismiss ‘information’.
“Investors are unlikely to ascribe value to material that is defined as ‘information’ as they would consider that they can obtain that themselves on the internet.
“There will be a cohort of consumers that either don’t want or can’t afford personal advice. However, they may wish to access general advice. There will also be a cohort of consumers who are happy to receive general advice or no advice for a certain period of time and then ‘jump in’ and receive episodic, personal advice when it suits them.”
Instead, SIAA suggested there could be a category called ‘strategic advice’ which would be separate from financial product advice to accommodate the reduced risk of consumer detriment associated with this type of advice.
This would include advice on areas such as budgeting, home ownership or the Centrelink pension or advice to small businesses that included financial strategic advice.
The delineation between the various terms would also help the industry to understand where to draw the line regarding ‘finfluencers’.
“Increasing the financial literacy of Australians is important, but those doing so on social media require clarity as to the line between both personal and general advice on the one hand (and why such advice requires licensing, qualifications in the case of personal advice and ongoing CPD) and factual information on the other.”
