ASIC Proposes Health Risk Warning For Retail Investment Products
The Australian Securities and Investments Commission says that investments and financial products should come with warnings in the same way products such as cigarettes come with warnings that they pose health risk.
The corporate regulator has outlined a set of new guidelines designed to regulate the way companies advertise financial products. The guidelines are part of the regulators attempt to crack down on advertising which is designed to market riskier retail derivative products.
Greg Medcraft who is the current chairman of ASIC says that investors should be made aware of the consequences of investments made in riskier financial products.
“I think it’s important that advertising be balanced, particularly in financial products,” he said.
“It’s almost important to have a health warning, but there’s consequences as well with some particular financial products.”
ASIC says it would like to see financial services companies engaging in a more balanced form of advertising.
According to Mr. Medcraft some evidence exists that certain consumers to take decisions based purely on advertising of the financial product.
“What’s important is to make sure that advertising is actually fair and that it’s balanced and that advertisements don’t just talk about the benefits of financial products, but that they do try to address the risks in financial products,” he said.
Mr. Medcraft singled out derivatives aimed at retail investors as a specific area of focus for the corporate watchdog.
“One sector that we’ve had to take a number of actions is in the retail derivative space,” he said.
“And I think often by definition that’s a very complex financial product, so it’s where there is obviously a high need to make sure that consumers do understand what they’re buying.”
The ASIC Chairman called on the Media to police their advertisers and ensure that they followed the guidelines.
“These are best-practice principles and I would expect that most media outlets would want to adopt best-practice principles,” he said. Compare Australian Term Deposit Account Deals
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