ARs not “independent”

A corporate authorised representative of Suncorp has been forced by ASIC to stop using the word “independent” for marketing purposes.

Citywide Insurance Brokers and Financial Planners Pty Ltd (Citywide) is one of three financial entities that has taken steps to remove or amend claims made about the independence of their services following concerns raised by ASIC.

“The independence of financial system gatekeepers … is an important issue for consumers and investors and may sway their decisions about their investments or their choice of adviser,” ASIC Deputy Chair Peter Kell says.

Citywide, which used the term “independent” on its website to describe its advisers, is a corporate authorised representative of Suncorp Financial Services Pty Ltd.

Suncorp and its authorised representatives may be remunerated through commissions and sets its advisers sales and retention targets in exchange for commercial benefits such as exclusive client services rights.

“Consumers must not be misled into believing that an adviser is independent and free from influence by commissions or other benefits or associations, when that is not the case,” Kell says.

Under the Corporations Act, financial services businesses are prohibited from using the restricted terms “independent”, “impartial” or “unbiased” in relation to the business or service except where the person does not receive commissions, volume-based payments or other gifts or benefits, and operates without any conflicts of interest.

Citywide has taken steps to review its marketing approval processes and has fully cooperated in responding to ASIC’s concerns.