Financial Advice is more than information about finance
The Australian Securities and Investments Corporation (ASIC) distinguishes between general information, and personal and scaled advice. The former can be done by anyone; the others require a licence.
You can tailor factual information to someone about whom you have specific information (such as someone who asked a question on Money SE) without crossing into advice. The examples in the ASIC document are illustrative:
Scenario
An organisation without an AFS licence includes on its website a list of financial products of a particular class available from third-party product providers, together with some objectively ascertainable factual information about specific product characteristics, with the aim of providing useful information for consumers to assist them to make a decision about the class of financial product.
Commentary
Because the information is factual and does not involve a qualitative judgement about, or an evaluation or assessment of, the features of the products, it is not financial product advice.
Scenario
A client contacts an insurer’s call centre and requests a quote for comprehensive car insurance. Noting the client’s car is old and of low value, the call centre operator mentions the possibility of third party property damage cover and explains the difference between it and comprehensive cover. At the client’s request, the call centre operator provides a quote for the annual premiums for each product.
Commentary
This is factual information. Although the call centre operator has been provided with some personal information about the client, and has used this information to provide relevant information to the client about an alternative product, the operator has not given an opinion or made a recommendation that is intended to, or that could be reasonably regarded as being intended to, influence a decision about a financial product.
Scenario
A superannuation fund would like to provide a brochure containing general advice about retirement planning issues to some of its members via a mailout. The general advice would be most relevant to members aged 55 and over.
Commentary
The fund can use personal information that they have about their members’ age to send the brochure to members who are 55 and over. Using the personal information about fund members in this way does not mean that the fund is providing personal advice. Instead, the fund is using personal information to provide general advice to a particular audience.
The disclaimer will not turn what is clearly advice into information but it makes clear that what is being presented is and is intended to be factual information. And, since the “advice” is considered as a whole in a prosecution the disclaimer can make a big difference.
