Quoting from research or other materials that support your
product or service can be a powerful marketing tool. So too is the
use of celebrity endorsements, lifestyle images, logos and music.
It is likely that these materials will be the intellectual property
of another person. If you use the intellectual property of another
person without their permission you risk a claim for damages from
the owner as well as reputational issues.
When you are using the words, names or images of other persons,
check carefully whether you need to get permission from the owner.
Always cite your sources if you are relying on technical
Further, if something you publish harms the reputation of
someone else then that person can seek injunctions to prevent the
publication and recover damages from you. Before you disparage a
competitor's products or services, consider whether anything
you plan to say reflects on their reputation in a way that makes it
likely people will think less of them as a result.
Specific restrictions on financial services advertising
Surprisingly, the financial services laws contain little direct
regulation of advertising. The main disclosure rules are to include
a "general advice warning" if the advertisement contains
general advice and, if the advertisement refers to a financial
product, how the PDS for that product can be obtained. There are
also prohibitions on the supply of unsolicited products and
services and "bait" advertising.
The Top 12 Problem Words
Here are our top 12 problem words – all of which should
only be used with great care.
These words, and other words with similar meaning, are
prohibited unless the user receives no commission or other
volume-based remuneration, or any gifts or benefits from a
financial product issuer that might be expected to influence its
advice. This is a high bar to leap – although somewhat easier
following the FOFA changes prohibiting the receipt of conflicted
Contravening this requirement is an offence. Theoretically at
least, it is also an offence to use these words in a negative sense
(e.g. stating that you are not independent) – although we
doubt if there is much usage in that manner.
'Bank', 'Stockbroker', 'Insurance
These words require particular authorisation to use from APRA
(in the case of 'bank') and ASIC (in the case of stock,
insurance or futures brokers).
Probably the most misused word of all – which is not
surprising given its marketing appeal. A service is not free if it
is subsidised through other charges. For example:
Advice is not "'free" if it is paid for out of
fees and costs of financial products clients are placed in as a
result of the advice.
An SMSF trust deed is not "free" if clients must
first enter into an administration contract with the provider.
In these situations it is better to describe the
"free" product or service as being provided "at no
If you don't intend to cover any loss your client may incur,
then avoid these words as they imply that you will. Be particularly
wary of using "guaranteed" as it has a legal meaning
which differs considerably from common usage.
ASIC considers financial investment to be complicated and tends
to regard solutions labelled as being easy or simple as ignoring
relevant considerations. For example, it is doubtful that ASIC
would consider it to be acceptable for any financial product
(perhaps other than a bank account) to be described as
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Digital advice providers should become familiar with these Regulatory Guides, and ensure they satisfy ASIC requirements.
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