An industry service provider has sent a cautionary message to advisers and advice business owners around updated advertising guidelines released by ASIC.
In June, the regulator updated Regulatory Guide 234 – Advertising financial products and services (including credit) – the first revision since its release in February 2012.
The updated guide contains new information reflecting ASIC’s enforcement and regulatory action on advertising and incorporates former guidance on past performance in promotional material (RG 53), which has been withdrawn.
Growth Studio Agency founder, Allan Whatmore, has cautioned anyone operating an advice practice that ASIC’s advertising guidance covers far more than paid advertisements: “Your website, social media posts, podcasts and short videos all sit inside it,” said Whatmore, adding that ASIC judges an advice practice’s advertisements from the perspective of the impression it believes a client or prospective client receives at first glance, regardless of any fine print.
Whatmore points out RG 234 is guidance; not updated law. He says it explains how ASIC reads the existing rules against misleading or deceptive conduct:
“A lot of advisers will read RG 234 as a list of things they can’t say. I’d read it the other way around. It’s a pretty clear picture of what a good ad looks like,” said Whatmore, whose Growth Studio Agency service assists advice firms run compliant client acquisition systems.
Who and what it covers
RG 234 sets out how ASIC expects promoters to meet their obligations and not make false or misleading statements or engage in misleading or deceptive conduct.
The guide identifies financial advisers, distributors and intermediaries, including lead generators, as promoters. It applies to advertising in any medium, from websites to podcasts, Instagram reels and TikTok videos, regardless of the technology used, including AI.
ASIC states it may take a greater interest in advertisements that do not meet its guidance.
First impressions
Central to the guide is the overall impression an advertisement creates when first viewed, as consumers cannot be expected to study or revisit it. Qualifications must appear at the same time as the original message, and a link, QR code or reference to a PDS will not correct a misleading headline claim.
Whatmore points to guidance noting that limited space in a banner or short video is not a reason to omit balancing information. If a format cannot accommodate it, he notes the guide recommends promoters should reconsider using that channel.
When advisers’ ads get sent back, it’s rarely about one bad word. It’s usually what the ads imply
“When advisers’ ads get sent back, it’s rarely about one bad word. It’s usually what the ads imply, such as a headline that hints at a result, or a testimonial that promises a result. A disclaimer at the bottom doesn’t fix that, and the guide says so,” Whatmore cautioned.
Guidance specific to advice
RG 234 stipulates advertisements for advice services should not:
- Describe a service as ‘comprehensive financial advice’ or ‘full financial plans’ if the adviser can only advise on a narrow range of issues or products
- Suggest advice is ‘free’ or ‘low cost’ if the client pays indirectly through product or administration fees
- Suggest the adviser will consider all relevant financial products across the market when that is not the case
- Misrepresent an adviser’s experience or qualifications
- Overstate the capabilities of digital or AI-enabled advice tools
Where past performance is used, ASIC suggests wording such as ‘past performance is not a reliable indicator of future performance’, noting phrases such as ‘past performance is not a guarantee of future performance’ and ‘future returns may vary’ are less likely to be effective.
Testimonials should also be authentic and attributed. A promoter that becomes aware of a third-party comment on its website or social media page and does not remove it will be considered responsible for it.
Planning ahead
The guide includes questions advice businesses can use to test their advertising, including whether it creates realistic impressions of what the advice will achieve and identifies its limitations. It says promoters should also keep records of their advertising and be able to substantiate claims about consumer outcomes.
“The fastest way to get your ads approved is to build in compliance from the start and incorporate the licensee’s requirements early. Fixing an ad after it’s written takes longer, and it usually ends up weaker. The licensee has the final say, and that’s how it should be,” said Whatmore, who concluded:
“The good news is that clear, honest ads tend to work better anyway. When you say plainly who you help and what the advice covers, the right people put their hand up. You don’t need a big promise to win a good client.”
Click here to download ASIC’s updated Regulatory Guide 234.
