Marketing Guidelines for Financial Services and Credit Providers

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Marketing Guidelins

There are strict rules governing the advertising and promotion of financial and credit products and services within Australia to protect consumers from being inappropriately influenced or mislead. ASIC Regulatory Guide 234 (“RG234”) provides advertising and marketing guidance to Australian Financial Services Licensees as well as Australian Credit Licensees (“Licensees”). RG234 also outlines the restriction of certain terminology some of which are restrictions derived from the Corporations Act 2001.

Section 923A Corporations Act restricts the use of certain words. These include:

  • Independent
  • Impartial
  • Unbiased

Licensees are not permitted to use these terms except in circumstances where the Licensee can meet the requirements of s923A (i.e.: they do not receive commissions, volume-based payments, or other gifts or benefits, and operate without any conflicts of interest).

Section 923B further restricts the use of certain terms unless the Licensee is authorised to provide such services:

  • Stockbroker
  • Sharebroker
  • Future broker
  • Insurance broker or insurance broking
  • General insurance broker
  • Life insurance broker

ASIC has also clarified its position on the use of the words “independently owned”, “non-aligned” or “non-institutionally owned”, stating that these terms are sufficiently similar to the restricted terms in s923A of the Corporations Act and are therefore also restricted. These terms can only be used where the financial services licensee is able to satisfy the conditions in s923A. 

ASIC’s guidance in RG234 also notes that the following terms should be avoided, unless you have the ability to substantiate the claim or where the term is used consistently with the ordinary meaning, as commonly understood by consumers:

  • Secure or secured
  • Guaranteed
  • Safe
  • First ranking
  • No fees

Licensees should be careful using these terms (or imagery which is associated with terms such as safety and security) and ensure that the safety of the product or services is not overstated. This is particularly relevant for higher risk products. Terms such as these can mislead the consumer as they do not accurately reflect the risks of trading in high-risk products.

ASIC has previously focused on financial services entities using the term “independent” in marketing material. RG234 states that a financial services provider should not claim a service they are providing is an ‘independent service’ or describe a service in language that infers independence unless they meet strict requirements.

In March 2016, ASIC posted a media release entitled “ASIC targets financial service licensees using the term independent” reiterating ASIC’s stance on using the term “independent” in marketing material. Three entities – Wilson HTM Ltd, iSelect Life Pty Ltd and Citywide Insurance Brokers and Financial Planners Pty Ltd – have all faced ASIC scrutiny regarding the use of the word ‘independent’ and have taken appropriate steps to remove or amend their marketing materials.

In 2012, ASIC advised that it would publicly name entities which were found to be making misleading statements about the independence of services provided.

In July 2018, ASIC required four (4) financial advisory firms to cease their use of the word “independent” or “independent owned” and amend their websites and marketing material. ASIC’s media release stated that it would continue to publicly name entities which did not comply with their obligations under s923A to ensure consumers are not misled.

Sophie Grace is able to provide marketing assistance to Licensees to ensure they comply with ASIC’s marketing guidelines by reviewing marketing material.

Licensees can also purchase a Marketing Checklist Template from our online shop to review their own marketing material.

Further reading

Further resources

Sophie Grace can assist you in meeting your compliance requirements including conducting marketing reviews. If you require assistance in reviewing your marketing material please contact us.

About The Author

Victoria Lombardo

Victoria Lombardo

Victoria provides support to our compliance and legal teams and assists our clients with the preparation and collation of documentation required for AFS and credit licence applications. She also supports senior staff by providing assistance to clients with the maintenance of their licences through the preparation of compliance policy documents and ongoing compliance support.