ASIC Releases Updated Legislation for Financial Advice
ASIC Releases Updated Legislation for Financial Advice
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The Australian Securities and Investments Commission (ASIC) has introduced a new, consolidated legislative instrument that relates to financial advice.
This update follows through on ASIC's May announcement regarding the remake of three existing advice-related instruments.
Titled the ASIC Corporations (Financial Services Guide, General Advice Warning and Advertising Related Relief) Instrument 2025/234, the new legislation continues to provide the same relief established by the earlier instruments, which have been in place for over a decade.
In June, the Financial Advice Association Australia (FAAA) expressed broad support for the new instrument. Nonetheless, the association pointed out some existing hurdles, particularly concerning general financial advice.
The FAAA appreciated the "flexible approach" of the previous legislation, known as LI 2015/540, which allowed general advice providers to offer a simplified general advice warning during oral advice sessions. However, the association highlighted potential challenges for consumers trying to distinguish between general and personal advice.
Amid general support for public forms of general advice like those given via advertising, presentations, and webinars, the FAAA acknowledged that confusion often arises with one-on-one advice. They suggested that clearer explanations of the benefits and shortcomings of each advice type would help consumers better understand the distinctions.
The FAAA also added that more could be done to ensure that recipients comprehend the limitations of general advice, both in written and verbal formats.
Despite these concerns, the updated legislative instrument remains almost identical to its predecessor. Under LI 2025/234, financial services licensees and their authorised representatives are exempt from subsection 949A(2) of the Act when orally providing general advice to retail clients, provided they caution the clients that:
The advice is categorised as general advice
The advice might not suit the client’s specific circumstances
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Asset-Backed Security (ABS): A financial security backed by a pool of assets, such as loans, leases, credit card debt, royalties, or receivables.
