Providers of general financial product advice will be able to give a simple oral general advice warning under a new class order issued by the Australian Securities and Investments Commission (ASIC).

The relief is a shorter, simpler warning than the usual one required for retail clients under the Corporations Act.

Director of Policy and Research Mark Adams says 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.

Mr Adams says that by focusing on the core message of the general advice warning, the relief makes it easier for retail clients to understand it when given orally. It also reduces 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,” he said. “It would be good practice to consider the needs of your audience when deciding what words to use.”

Warnings that could be given under the relief include: “This advice is general, it may not be right for you”; and, “This advice is not tailored, so you can’t assume it will be suitable for you”.

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.