ASIC has placed Australia's financial planning and insurance broking industries on notice after sector surveillance found more than 20 cases of clients being misled by industry participants' incorrect use of the term 'independent'.
The corporate regulator yesterday announced a surveillance project found 21 instances of insurance brokers and financial planners breaching the Corporations Act by making statements about the independence of the licensee or the services they provided.
The licensees identified included 17 general insurance brokers, three financial planners and one life broker. In one instance, the statement was found on the website of an authorised representative, ASIC said.
"We will not tolerate them [clients] being misled on the important issue of the independence of financial system gatekeepers such as financial advisers and insurance brokers," ASIC commissioner Peter Kell said in a statement.
ASIC conducted the survey after receiving a single complaint, allowing it to assess the extent of the "inappropriate" use of the 'independent' tag, Kell said.
"This action puts the broad financial services industry clearly on notice about ASIC's expectations. Going forward, where we find incorrect information about independence we will be taking stronger action, including publicly naming the licensees involved," he said.
Licensees were prohibited from using the terms, 'independent', 'unbiased' or 'impartial' if they received commission or volume-based payments, ASIC said.
The relevant financial services licensees had now voluntarily complied with ASIC's request to remove or amend the statement in each of the 21 instances, it said.
