ASIC has released a consultation paper and draft regulatory guide containing proposed best practice guidance for the advertising of financial products and financial advice.

Who it applies to
ASIC proposes that its guidance applies to:
• promoters of financial products and financial advice services. The promoter will sometimes be the product issuer, but can also be a third party such as a financial adviser, distributor or agent; and
• publishers of promotions about financial products and financial advice services.

What products it applies to
ASIC proposes that its guidance applies to all types of financial products, including:
• investment products;
• risk products;
• non-cash payment facilities; and
• credit facilities.

Its guidance would also apply to both general and personal financial product advice.

ASIC proposes to issue, at a later date, additional guidance for credit providers and providers of credit services under the National Credit Act.

What the guidance will cover
The guidance will cover:
• the nature of the product;
• returns, benefits and risks;
• warnings, disclaimers, qualifications and fine print;
• fees and costs;
• comparisons;
• past performance and forecasts;
• use of certain terms and phrases;
• the advertisement’s target audience;
• consistency with disclosure documents;
• photographs, diagrams, images and examples; and
• the nature and scope of advice.

The draft guidance contains examples of the issues ASIC is concerned about.

What media it will apply to
The guide will be directed at promoters in developing advertisements for specific media, including:
• mass media, such as radio, television, newspapers, magazines and internet (including social media);
• telemarketing activities and audio messages for telephone callers on hold;
• direct mail (e.g. by post, facsimile or email);
• presentations to groups of people, and advertorials; and
• outdoor advertising.

Comments on the consultation paper and draft regulatory guide are due by 25 October 2011.