(a) ASIC has the function of monitoring the financial services industry.
(b) A key change in the FSR Act is the requirement for product disclosure.
(c) All financial organisations and financial advisers need to be licensed.
(d) A product disclosure statement must be given to a consumer before she or he makes a final
agreement.
(e) Consumers must be informed of the risk involved with any investment advice or product and the
level of fees to be charged.
(f) Consumers should contact the NSW office of Fair Trading to complain about a possible breach of
the Consumer Credit Code.
The Financial Services Reform Act (FSRA) 2001 reformed the financial services industry.
ASIC’s role is to monitor the financial services industry and the provision of investment advice, and
to give consumer protection in financial services.
(a) PDS stands for product disclosure statement.
(b) The PDS contains information about the risks, fees to be charged, a full description of the
product, and tax information.
The main roles of the Consumer Credit Code are:
• to standardise credit transactions and practices across Australia
• to ensure that credit information is presented in a clear and easy format
• to require credit providers to truthfully disclose information regarding credit agreements
• to protect consumers if they get into difficulty with their credit.
(a) Financial institutions may have failed to provide certain information in order to make their offer
sound more appealing.
Without consequences for their actions, financial institutions could use unethical practices to
persuade people to sign contracts.
Without licensing, there would be no minimum standards of conduct for advisers.
Many people are not well informed about the questions they need to ask when asking a financial
institution for advice.
(b) The main benefit of the FSRA for consumers is that they know that they will be provided with all
the information they need when deciding what product to choose.
Our 3 key tips for managing your money
1.
2.
3.
Decide what you really want, and focus on your most important goals.
Start saving now: you can start small and increase your savings gradually (they’ll grow with interest,
too).
Always check the facts: ask questions and get professional advice. If you aren’t comfortable or don’t
understand, don’t go ahead.
People get into financial difficulties for all sorts of reasons:



Personal reasons: unemployment, illness, marriage or relationship breakdown
Economic and business reasons: rising interest rates, business failure, poor investment
decisions or fraud
Poor financial management: living so close to the limit of your financial capacity that one
mishap lands you in trouble, or borrowing too much on credit cards and store finance; or
spending far more than you can safely afford.
Source: http://www.fido.asic.gov.au/fido/fido.nsf/byHeadline/Money%20management
8 Locate a financial adviser in the Yellow Pages and use the FPA weblink in your eBookPLUS to find
out if they are accredited by the Financial PLanning Association.
Contact us
Financial Planning Association of Australia
Source: http://www.fpa.asn.au/FPA_Contacts.aspx
9 Use the Consumer Credit Code weblink in your eBookPLUS to learn more about the code.
The Consumer Credit Code was developed in response to business and consumer concerns as a national
initiative to standardise credit practice in Australia.
If you buy goods, services or land now and pay a charge for them later, then you are being provided with
credit. You may have borrowed money from a bank, paid for the goods on a credit card or simply owe money
to a business. If you pay a business for credit and use it mainly for personal, household or domestic purposes,
the Consumer Credit Code will affect you.
The Consumer Credit Code covers a considerably wider range of credit transactions than previous laws. A
credit provider is defined as any business which provides finance to purchase goods, services and land or to
lease goods. The Consumer Credit Code applies to these credit providers if they charge for the credit and if
their customers are individuals or residential strata corporations who use it mostly for personal, household or
domestic purposes.
Source: http://www.creditcode.gov.au/display.asp?file=/content/what_is_the_credit_code.htm