The corporate regulator has revealed its position on the definition of independent financial service provision, in a move likely to impact thousands of financial advisers.
In a statement issued yesterday, ASIC announced its opinion that a financial service provider “cannot use terms such as ‘independently-owned’, ‘non-aligned’ and ‘non-institutionally owned’ if it does not satisfy the conditions in s923A”, following “external legal advice” on the matter.
The new interpretation of s923A would restrict financial advisers that that receive un-rebated product commissions (including for insurance products) or any remuneration based on volume of business from describing themselves to consumers as non-aligned or independently-owned, regardless of ownership structures.
ASIC has also stated that, in some cases, being subject to a non-open approved product list (APL) would mean being unable to use any of the relevant terms, but has said accepting asset-based fees should not be considered a breach of s923A.
The regulator has granted a period of six months for advisers to comply with the revised position, including removing any restricted terms from marketing collateral.
Peter Johnston, executive director of the Association of Independently Owned Financial Professionals, said his organisation has been granted a reprieve whereby members will still be able to market themselves as being members on the condition that they attach a qualifying disclaimer.
The AIOFP and its members, most of whom are licensees who describe themselves as independently-owned or non-aligned, will now be approaching parliamentarians to lobby for the repeal of the relevant legislation or a broadening of the definition.
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