SIAA suggests ‘strategic advice’ definition
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.”
AUTHOR
Laura Dew
Recommended for you
The board of Insignia Financial has reached a decision regarding the possible acquisition of the firm by US private equity giant Bain Capital.
Six of the seven listed financial advice licensees have reported positive share price growth in 2024, with AMP and Insignia successfully reversing earlier losses.
There has been a 16.3 per cent rise in the wealth of Australian billionaires this year to over $200 billion, UBS finds, as Australian advisers shift their offerings to meet this expansion and service their unique needs.
AZ NGA is looking to triple in size over the next five years as US investment giant Oaktree completes its $240 million investment in the professional services company.
