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While brokers are restricted in what they can and can’t say, due to National Consumer Credit Protection Act (NCCP) regulations, unlicensed TV commentators appear to be above this legislation.
Burdened by NCCP restrictions, some brokers have begun complaining about TV commentators giving ‘financial advice’, although a leading lawyer claims doing so may cause more trouble than it’s worth.
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One disgruntled broker forwarded information to The Adviser regarding a well-known investment commentator who allegedly gave viewers of Channel 7’s news program financial advice.
“How can he be giving viewers advice without doing a formal assessment of the viewer’s personal circumstances, and without issuing the required NCCP documents or following NCCP legislation?” the broker asked.
According to this broker, the investment ‘expert’ also went on to recommend that viewers refinance with an online bank that offers cheap rates.
However, according to NCCP expert and lawyer Jon Denovan, not only was the commentator engaging in perfectly legal activities, he believes brokers making a scene about it would only cause more harm to the industry.
“Brokers have got some pretty tight restrictions, and they’ve definitely got to be careful around this issue,” he told The Adviser.
“[On the TV] it’s not aimed at a particular individual, it’s not about a specific loan contract and therefore it’s not regulated.” he said
“But we obviously don’t want any more regulation, so the people who are complaining should be careful what they wish for.”
However, this doesn’t mean that brokers can jump on the small screen and give ‘general’ financial advice either.
“A broker is in a different situation from the bloke on the telly because they’ve been given a licence and therefore they have a higher standard of care. In the broker’s licence conditions, there is a line that says that they will act efficiently, honestly and fairly,” Mr Denovan explains.
Mr Denovan believes it is this caveat that the Australian Securities and Investments Commission can use in cases where brokers are just offering unregulated ‘general’ advice.
