The grace period has officially ended for financial advisers who describe themselves as ‘non-aligned’ or ‘independently-owned’ but do not meet the legal definition of independent financial advice.
In June 2017, ASIC clarified its position on section 923A of the Corporations Act, ruling that any financial advisers who use terms such as “independently-owned”, “non-aligned”, “non-institutionally-owned” or other terms of “like import” must comply with the definition outlined in the Act.
Subsequent correspondence from ASIC senior executive leader Joanna Bird to various stakeholders, seen by ifa, confirmed that financial advisers who do not meet the definition outlined in s923A will have to remove any problematic references from their websites and other marketing material by 1 January 2018.
Speaking to ifa, AIOFP executive director Peter Johnston said it is important that independently-owned licensees and practices are aware that the specified deadline for implementation of ASIC’s new position has now passed.
"All advisers who are not s923A-compliant must remove any reference to or use of the term 'independently-owned' on any promotional material to consumers," Mr Johnston explained. "Everyone has had six months to comply so we expect ASIC to show little mercy with those who do not comply."
He said the best way for advisers who have previously used these terms but do not wish to meet the criteria outlined in s923A to differentiate themselves is to join the AIOFP, whose members will be able to use the association’s logo albeit alongside a disclaimer explaining they may accept risk or grandfathered investment commissions.
The topic was one of the more contentious and hotly debated in 2017, as referenced in ifa’s 2017 Year in Review special feature.
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