ASIC examining financial calculator loophole

ASIC is reviewing the use of the advice relief provision extended to providers to ensure correct information is used

13-Oct-2017

By Darin Tyson-Chan

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ASIC is reviewing the use of the advice relief provision extended to providers of financial calculators to ensure certain service providers are not using it to provide personal advice in the guise of general advice.

Speaking at the Association of Financial Advisers 2017 National Conference on the Gold Coast yesterday.

Map My Plan advisory board member Simon Micallef told delegates the regulator had flagged it was on the watch for companies that were offering personal advice but trying to get away with a general advice ruling.

“It’s an important aspect and ASIC is looking at that at this point in time,” he said.

According to Micallef, the problem stemmed from relief regarding financial calculators.

“ASIC provides a relief if there is a generic calculator being used for the purposes of providing generic information to a client, which is seen to be a cost effective educational tool,” he said.

“So the regulator is saying [the use of financial calculators] is personal advice but we’re going to give relief to these circumstances if you do these two very important things.

“The first one is the information collected can only be used for general calculation advice only and secondly that you can’t have any advertising, any promotion, and no product advice linked to that.

“And if you meet those conditions it will only be considered general advice. Therefore as a result no SOAs (statements of advice) are required in the process.”

Micallef pointed out he had noticed some robo-advice providers using this relief to claim they were providing general advice when personal advice was actually being offered.

“[There is a service provider where] in its process they have taken a full relief because of all the calculators they are using,” he said.

According to Micallef these organisations were then claiming only generic calculation information was being provided to the user.

“Then they go on to say that our staff, directors and associates only provide general advice and consider none of your personal circumstances and as a result we’re not going to issue an SOA,” he explained.

“So they’re the general advice warnings ASIC is looking at.”

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