ASIC break on basic advice in rural areas

Rural financial counselling and money management service providers will be exempt from licensing requirements following an ASIC ruling

The regulator has decided to grant the conditional relief under the National Consumer Credit Protection Act 2009.

Money management service providers who give financial advice about basic deposit products in the course of providing a money management service have also been granted limited relief from licensing requirements.

Rural financial counselling services are available to primary producers and rural small businesses in financial difficulty and are funded in whole, or in part, by the Commonwealth Government through the Department of Agriculture, Fisheries and Forestry (DAFF) or, in Queensland, through the Department of Employment, Economic Development and Innovation (DEEDI).

“Money management services are provided predominantly to improve the financial knowledge and skills of consumers, principally indigenous consumers in regional and remote Australia,” said ASIC in a statement.

“These service providers are funded in whole, or in part, by the Commonwealth through the Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA).”

ASIC senior executive leader Delia Rickard said the exemptions recognise the important assistance and support these services provide to rural small businesses and Indigenous communities around Australia.

“The exemption for rural financial counselling service providers will ensure that they can continue to provide services to primary producers and rural small businesses in financial difficulty,” says Rickard.

“The exemption for money management service providers will ensure that these important financial literacy programs can continue to provide services to consumers, mostly indigenous consumers in regional and remote Australia.”

ASIC’s exemptions are subject to a number of conditions, namely that:

• the regulated service is provided to the consumer as part of a rural financial counselling or money management service;
• no fees or charges are payable by the consumer for any aspect of the rural financial counselling service or money management service;
• the service providers do not engage in any credit activity or financial services business beyond the scope of these exemptions, and take all reasonable steps to ensure that none of their employees do so; and
• the service provider ensures its representatives have undertaken appropriate training to ensure that they have adequate skills, knowledge and experience to satisfactorily provide the services.