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ASIC targets ‘independent’ businesses

The corporate regulator has taken action against three financial services businesses after it was found they were making improper claims to be “independent”.

ASIC said Citywide Insurance Brokers and Financial Planners, a corporate authorised representative of Suncorp Financial Services, used the term “independent” on its website to describe its advisers.

Suncorp and its authorised representatives may be remunerated through commissions. It also sets its advisers sales and retention targets in exchange for commercial benefits, ASIC said.

“Wilson [HTM] used the term ‘independent’ to describe its business on its website and in a brochure that was distributed to consumers. iSelect [Life] used the term ‘independent’ to describe its services in three marketing emails that were distributed to consumers,” it said.

“Wilson and iSelect both accept volume-based payments and commissions from product issuers in relation to the provision of financial services and advice.”

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ASIC deputy chair Peter Kell said 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.

“The independence of financial system gatekeepers such as financial advisers is an important issue for consumers and investors, and may sway their decisions about their investments or their choice of adviser,” he said.

Under the Corporations Act, a person who carries on a financial services business or provides financial services is prohibited from using the restricted terms

“independent”, “impartial”, or “unbiased” in relation to the service except where the person does not receieve commissions, volume-based payments, benefits, and operates without any conflicts of interest.

[Related: Lender penalised for overcharging consumers]

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