ASIC has required a number of Australian Financial Services Licensees, including an insurance broker to remove or amend claims made about the independence of their services in marketing and promotional materials.
Under the Corporations Act, a person who carries on a financial services business or provides a financial service is prohibited from using the restricted terms “independent”, “impartial” or “unbiased” in relation to the business or service except where the person does not receive commissions, volume-based payments or other gifts or benefits, and operates without any conflicts of interest. It would be rare that an insurance broker would fit within this carve out.
ASIC’s position is that consumers must not be misled into believing that an adviser is independent and free from influence by commissions or other benefits or associations, when that is not the case.
ASIC has previously announced that it would publicly name entities which were found to be unlawfully making statements about the independence of the licensee or the services they provide, following an earlier surveillance project (refer 12-083MR).
See ASIC targets financial services licensees using the term “independent” for full details.
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