This advice is general, it may not be right for you

Professionals who provide general advice about financial products can water down the warnings they have to give clients, with new rules allowing them to give shorter, simpler disclaimers face-to-face or over the phone.

The Australian Securities and Investments Commission said the following terminology will be adequate:

- This advice is general, it may not be right for you;
- This advice is not tailored, so you can't assume it will be suitable for you;
- This advice may not be suitable for you because it is general advice;
- You will need to decide whether this advice meets your needs because I haven't.

ASIC ANNOUNCES SIMPLER WARNINGS FOR ORAL GENERAL ADVICE
The Australian Securities and Investments Commission (ASIC) today announced relief for providers of general financial product advice. The change will allow providers to give a shorter, simpler general advice warning when they provide oral general advice.

Under the Corporations Act a prescribed kind of general advice warning must be given when general advice is provided to a retail client. This relief will allow a shorter, simpler warning than the prescribed kind to be given.

The relief is provided under ASIC Class Order [CO 05/1195] Simplified warning for oral general advice.

ASIC's Director of Policy and Research, Mr Mark Adams said giving a warning that explains the limitations of general advice provides an important protection for retail clients, making it less likely that they will act on the general advice in the mistaken belief that it is necessarily right for them.

'By focussing on the core message of the general advice warning, this relief makes it easier for retail clients to understand the warning when it is given orally as well as reducing the regulatory burden on general advice providers.'

'General advice providers are not required to use the words used in the class order, but can develop their own words to convey the simpler warning. It would be good practice to consider the needs of your audience when deciding what words to use', Mr Adams said.

The following are some examples of warnings that could be given under the relief:
- This advice is general, it may not be right for you;
- This advice is not tailored, so you can't assume it will be suitable for you;
- This advice may not be suitable for you because it is general advice;
- You will need to decide whether this advice meets your needs because I haven't.

Under the relief the simpler warning needs to be given only once in any telephone conversation or face-to-face meeting where general advice is provided to a retail client.

In August 2005, ASIC released a consultation paper, inviting comments on proposed relief to reduce the repetition of the general advice warning while minimising consumer confusion about what kind of advice they are getting.

The consultation paper was the second step in ASIC's project implementing Refinement Proposal 5.1 of the Federal Government's proposals paper Refinements to Financial Services Regulation (2 May 2005): see IR 05-49 ASIC consults on proposal to reduce repetition of the general advice warning (31 August 2005). In finalising its relief for general advice providers, ASIC has taken into account submissions received in response to this consultation paper. The release of [CO 05/1195] completes ASIC's work on Refinement Proposal 5.1.