Following recent action by ASIC against AFSL representatives who were inappropriately using the word "independent" in describing their services, the AIOFP has reminded advisers that any use of the term must be in line with The Corporations Act.
ifa reported recently that ASIC had taken action against Wilson HTM, Citywide Insurance Brokers and Financial Planners, and iSelect Life after it was found they were making improper claims to be "independent".
In response, AIOFP executive director Peter Johnston sent a reminder to members to ensure they comply with section 923A of The Corporations Act.
"You cannot use the term 'independent', 'unbiased' or any similar term unless you qualify under 923A," Mr Johnston said.
"We suggest that you have a close look at any terminology you are using on your website to ensure it complies with the 923A guidelines.
"In regard to the term 'independently owned' and the AIOFP, we had legal clearance many years ago that because the AIOFP does not hold an AFSL and the term refers specifically to practice ownership not advice, you are permitted to inform the public you are a member of the AIOFP," he said.
As per section 923A of The Corporations Act, a person who carries on a financial services business or provides financial services is prohibited from using the restricted terms "independent", "impartial", or "unbiased" in relation to the service they provide except where the person does not receive commissions, volume-based payments, benefits, and operates without any conflicts of interest.
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