The phrase “general advice” should be done away with as it is potentially misleading for consumers, the Financial System Inquiry has concluded.
In the FSI final report, handed down yesterday, the inquiry committee recommended the controversial term be replaced with a more “appropriate, consumer-tested term”.
“The use of the word ‘advice’ may cause consumers to believe the information is tailored to their needs,” the report warned.
“Behavioural economics literature and ASIC's financial literacy and consumer research suggests that terminology affects consumer understanding and perceptions,” it continued.
The Financial Services Council issued a statement endorsing the FSI’s conclusion on this issue.
“The FSC recommended to the FSI that ‘general advice’ should be relabelled to ‘general information’ to help provide greater consumer clarity,” said outgoing chief executive John Brogden.
“We are pleased our recommendation has been adopted.”
SUBSCRIBE TO THE IFA DAILY BULLETIN
- 15 Feb 2019ASIC to undertake harsher penalties against banksBy Eliot Hastie
- 15 Feb 2019Court restrains unlicensed firm from operatingBy Adrian Flores
- 15 Feb 2019ASIC used Dover whistleblowing to shut licensee downBy Adrian Flores
- 15 Feb 2019Minimal time spent on client engagement, survey findsBy Adrian Flores
- 15 Feb 2019Advice regtech aims to ease CPD burden under FASEABy Adrian Flores
- 14 Feb 2019AMP adviser network declined 4.6% in 2018By Adrian Flores
- view all