A Guide to Australian Financial Services Marketing Compliance

Introduction

Marketing financial products and services in Australia are a high-stakes endeavour, operating under a complex regulatory regime designed to safeguard consumers from misleading practices and uphold market integrity. Regulators, led by the Australian Securities and Investments Commission (ASIC), enforce these strict rules across all marketing materials and channels. For any Australian Financial Services (AFS) Licensee, failure to ensure their financial services marketing is compliant can result in significant fines and reputational harm.

This guide serves as a practical playbook for marketing teams and compliance officers, translating complex legislation like the Corporations Act 2001 (Cth) and key regulatory guides into actionable best practices. It provides the essential framework and tools needed to create marketing content that is not only effective but also beyond reproach. By embedding these principles, financial services firms can build consumer trust while ensuring every campaign meets the regulator’s expectations.

The Golden Rules of Financial Marketing Compliance

Prohibiting Misleading & Deceptive Conduct

The foundation of all financial services marketing compliance is the strict prohibition against misleading or deceptive conduct. This core principle is established under two key pieces of legislation:

• Section 1041H of the Corporations Act 2001 (Cth)
• Section 12DA of the Australian Securities and Investments Commission Act 2001 (Cth)

These laws clearly state that a person must not engage in conduct related to a financial product or service that is misleading, deceptive, or likely to mislead or deceive.

Crucially, it is not necessary to prove that there was an intention to mislead. The regulator, ASIC, applies an objective test that focuses on the “overall impression” created by the marketing materials on an ordinary and reasonable member of the target audience.

This means that even factually correct statements can be deemed misleading if the total message—including headlines, images, and fine print—creates a false or unbalanced impression. A failure to comply can lead to significant civil liability, including compensation orders.

The Duty to Act Efficiently, Honestly & Fairly

Beyond the specific rule against misleading conduct, AFS licensees are bound by a broad, overarching duty. Section 912A of the Corporations Act 2001 (Cth) requires a licensee to do all things necessary to ensure that financial services are provided “efficiently, honestly and fairly.”

This is a powerful, standalone obligation, known as the ‘honestly and fairly’ obligation, that applies to all of a licensee’s activities, including marketing. The duty functions as a community expectations test, requiring licensees to maintain robust systems and processes that ensure fairness and integrity in all their commercial dealings.

For marketing teams, this means that campaigns must not only be technically accurate, but also align with broader standards of commercial morality. A breach of this duty can occur even if no other specific law has been broken, and may result in substantial civil penalties.

ASIC’s Key Advertising Principles in RG 234

Ensuring an Accurate & Balanced Overall Impression

The most critical principle within ASIC’s Regulatory Guide 234 (RG 234) is that the “overall impression” of any marketing material must be accurate and not misleading. This assessment goes beyond the literal accuracy of individual statements and considers the cumulative effect of all elements, including headlines, images, and fine print.

The key test is the impression created for an ordinary and reasonable member of the target audience upon their first viewing of the advertisement.

An advertisement can be deemed misleading even if all its statements are technically correct. For instance:

• A prominent headline or powerful image can create a dominant message that is not corrected by less noticeable qualifications
• A disclaimer or information hidden in fine print cannot be used to “cure” a misleading headline
• Subsequent information on another webpage or in a Product Disclosure Statement (PDS) is not sufficient to fix the initial misleading impression

Balancing Risks & Benefits

Financial services marketing must present a balanced message, giving equal prominence to the risks, fees, and limitations of a financial product as it does to the potential benefits and returns. ASIC’s guidance in RG 234 makes it clear that benefits should not be given undue prominence over associated risks.

This means that information about risks must be clear, conspicuous, and not undermined by the advertisement’s tone or imagery.

To comply, marketing teams should ensure that risk disclosures are presented with similar font sizes, colours, and placement as the benefits being promoted. Consider these examples of non-compliance:

Example of Non-Compliance	Reasoning for Being Misleading
Advertising a high-risk product like CFDs with a headline like “Build personal wealth with low-risk trading strategies”.	This fails to accurately reflect the high risks involved and gives undue prominence to a supposed benefit (low risk) that is false.
Promoting a reverse mortgage with the claim “no repayments ever”.	This is misleading because while regular repayments are not typically required, the loan must eventually be repaid.

Past Performance & Future Projections

There are strict rules for using historical data or forecasts in marketing materials to avoid creating unrealistic expectations. When presenting past performance, all marketing content must include a prominent and unambiguous warning that “past performance is not a reliable indicator of future performance.” This warning should be placed near the performance data.

Any claims about future performance or projections must be based on reasonable grounds that exist at the time the representation is made. Key considerations include:

Consideration	Key Requirement
Reasonable Basis	Under section 769C of the Corporations Act 2001 (Cth), any forecast must be supported by reasonable assumptions, which should be disclosed.
Balanced Information	Performance data should cover a relevant and sufficient period to give a balanced view; selective presentation of only the best periods is likely to be misleading.
Clear Warnings	It must be clear that forecasts are not guaranteed to occur, and the limitations of any projection should be plainly stated.

Clear Language & Restricted Terms

Marketing materials must use plain, unambiguous language that is easily understood by the target audience. The use of industry jargon should be avoided unless the promoter is confident the audience will understand it.

Vague or exaggerated terms such as “secure” or “guaranteed” should only be used if they can be fully substantiated and are not likely to create a misleading impression.

Furthermore, section 923A of the Corporations Act 2001 (Cth) places strict prohibitions on the use of certain terms. These restricted words include:

• Independent
• Impartial
• Unbiased

ASIC has also clarified that terms of “like import,” such as “independently owned,” “non-aligned,” or “non-institutionally owned,” are also restricted. A financial service provider can only use these terms if they meet specific statutory conditions, which include not receiving commissions, volume-based payments, or other benefits from product issuers, and operating without any conflicts of interest.

Navigating Social Media & Finfluencers

Scenarios for Influencers What They Can & Cannot Do

ASIC’s Information Sheet 269 (INFO 269) provides clear guidance on the boundaries for social media influencers, or “finfluencers,” when discussing financial products. The regulations distinguish between providing factual information, which is generally permissible, and activities that require an Australian Financial Services Licence (AFSL).

Activities requiring an AFSL include:

• Providing financial product advice
• Dealing by arranging

An influencer’s content may be considered unlicensed financial product advice if it includes a recommendation or opinion intended to influence a decision about a financial product. Receiving payment for commentary makes it more likely that ASIC will view the content as financial advice.

Here are some examples of what is and is not considered financial product advice:

Type of Content	Example
Likely financial product advice	A post stating, “I’m going to share with you five long-term stocks that will do well and which you should buy and hold.”
Unlikely to be financial product advice	A video explaining, “You can invest by buying shares – this means you are investing in a company.”

“Dealing by arranging” is another regulated financial service that requires a licence. This occurs when an influencer is actively involved in making a transaction happen.

For instance:

Scenario	Classification
Promoting a unique affiliate link to a trading platform, where the influencer receives a payment for each click-through that results in a trade.	Likely to be considered dealing by arranging, requiring an AFSL.
Simply providing the names of AFS Licensees with trading platforms, without further involvement.	Unlikely to be dealing, as it does not actively arrange a transaction.

Finally, all influencer content must comply with the prohibition on misleading or deceptive conduct, regardless of whether the influencer is licensed. This means:

• Statements must be truthful and substantiated
• The overall impression must not mislead the audience

For example, a post claiming, “Trading in this derivative is a risk-free way to make a quick profit,” is likely to be misleading because it downplays the significant risks involved.

AFS Licensee Responsibilities for Influencers

When an AFS Licensee engages an influencer, it can be held liable for the influencer’s misconduct, as the influencer may be considered a type of authorised representative of an AFS licensee under financial services laws. ASIC expects licensees to have robust systems in place to manage these arrangements and ensure compliance.

Licensees must fulfil several obligations when working with finfluencers:

Obligation	Description
Conduct due diligence	Thoroughly vet any influencer engaged, including assessing their understanding of financial services laws and ensuring they are adequately trained.
Implement risk management systems	Establish and maintain appropriate risk management and monitoring processes to ensure influencers do not provide unlicensed services or engage in misleading conduct.
Provide sufficient compliance resources	Have adequate compliance resources to effectively monitor engaged influencers, including reviewing their content for regulatory alignment.
Align with Design and Distribution Obligations (DDO)	If promoting a product subject to DDO, take reasonable steps to ensure the influencer only promotes it to consumers within the product’s defined target market.

Marketing Compliance Checklist for AFS Licensees

A robust compliance process is essential for any financial services marketing campaign. This practical checklist synthesises key regulatory principles from ASIC’s guidance, including RG 234, to help marketing and compliance teams review materials before launch. Using this tool can help ensure every piece of marketing content is compliant and aligns with best practices.

Part 1: Foundational Requirements and Disclosure

When preparing marketing materials, ensure you address these fundamental compliance requirements:

Requirement	Description
AFSL Identification	Is the AFSL number and the full name of the licensee clearly and prominently displayed on all marketing materials?
Product Issuer Identification	Is the issuer or manufacturer of the financial product clearly identified?
General Advice Warning (GAW)	If providing general advice, the warning must state that the advice does not consider the recipient’s personal circumstances and that they should consider its appropriateness before acting.

Part 2: Content Accuracy and Balance

Creating balanced and accurate content is crucial for regulatory compliance:

Checklist Item	Compliance Focus
Overall Impression	Does the overall impression accurately reflect the product or service? Ensure headlines, images, and key claims are not inconsistent with the fine print.
Balancing Risks and Benefits	Are the risks, fees, and limitations given equal prominence to potential benefits? The presentation must be balanced and not visually biased towards rewards.
Performance Claims	If using past performance data, is a prominent warning that “past performance is not a reliable indicator of future performance” included? Future projections must be based on reasonable grounds.
Fair Comparisons	When comparing products, is the comparison fair, balanced, and based on sufficiently similar features? All claims must be able to be substantiated.

Part 3: Audience and Targeting

Understanding and appropriately targeting your audience is essential for compliance:

Consideration	Compliance Requirement
Design and Distribution Obligations	Does the campaign align with the product’s Target Market Determination (TMD)? Reasonable steps must be taken to promote the product only to the appropriate consumer segment.
Anti-Hawking Rules	Does the campaign risk making an unsolicited, real-time offer? Ensure any follow-up contact has been consented to in a positive, voluntary, and clear manner.
Target Audience Appropriateness	Is the language and complexity of the content suitable for the financial literacy and characteristics of the target audience?

Part 4: Specific Channels and Endorsements

Different marketing channels require specific compliance considerations:

Channel / Method	Compliance Check
Social Media and Influencers	Has due diligence been completed on the influencer? Ensure their content does not constitute unlicensed financial product advice and that paid partnerships are clearly disclosed.
Testimonials and Endorsements	Are any client testimonials or endorsements authentic, typical, and compliant? Be aware that testimonials relating to financial advice are heavily restricted.

Marketing & Other AFS Compliance Rules

Understanding Anti-Hawking Prohibitions

The anti-hawking rules, detailed in ASIC Regulatory Guide 38 (RG 38), place strict prohibitions on the unsolicited selling of financial products. These rules are designed to protect consumers from high-pressure sales tactics by banning offers of financial products during or because of unsolicited, real-time contact with a retail client.

For marketing teams, this means a consumer must provide positive, voluntary, and clear consent to be contacted about a particular class of financial product before an offer can be made. Simply downloading a guide or registering for a webinar does not automatically grant consent for a follow-up sales call about a specific product.

The prohibition covers various forms of real-time interaction, including:

• Telephone calls
• In-person meetings
• Live streams
• Instant messages and AI chatbots

Aligning Marketing with Design & Distribution Obligations

The DDO, outlined in ASIC RG 274, require a consumer-centric approach to marketing. Under this regime, product issuers must create a TMD for each financial product. This document publicly defines the class of consumers for whom the product is likely appropriate, based on their needs, objectives, and financial situation.

Marketing campaigns must be aligned with the product’s TMD to ensure the financial product is promoted only to the appropriate consumer segment. This transforms targeting from a purely commercial activity into a legal obligation. AFS Licensees must take “reasonable steps” to ensure their distribution and promotional activities are consistent with the TMD. Additionally, they need to monitor campaigns to prevent them from reaching consumers outside the defined target market.

Conclusion

Adhering to Australia’s strict financial services marketing laws, from the core principles against misleading conduct to ASIC’s detailed regulatory guides, is fundamental for any AFS Licensee. Navigating compliance across all channels, including social media, and aligning with broader obligations like DDO and anti-hawking requires a proactive and systematic approach to protect consumers and build trust.

To ensure your financial services marketing is not only compliant but also a competitive advantage, contact the expert AFSL lawyers at AFSL House today. Our tailored compliance frameworks and trusted expertise help you turn regulatory challenges into strategic opportunities, securing your brand’s reputation and value.

Frequently Asked Questions (FAQ)