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.”
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