Australia's financial regulator continues to crack down on what it sees as shortcomings and abuses in the advisory sector.

Australia's financial regulator has told brokerages and advisors to remove the word "independent" from their brand or amend their names as a result of concerns over potential conflicts of interest.

Wilson HTM Ltd (Wilson), iSelect Life Pty Ltd (iSelect) and Citywide Insurance Brokers and Financial Planners Pty Ltd (Citywide) have taken steps to remove or amend claims made about the independence of their services following concerns raised by the Australian Securities & Investments Commission.

The watchdog said it was concerned about the use of the the word "independent" in the entities’ marketing and promotional materials.

ASIC has been pushing to raise standards in the wealth management and advisory sector, cracking down on abuses and removing a number of miscreants from the industry. For more, see here.

Under Australia's Corporations Act, a person who carries on a financial services business or provides a financial service is prohibited from using the restricted terms “independent”, “impartial” or “unbiased” in relation to the business or service except where the person does not receive commissions, volume-based payments or other gifts or benefits, and operates without any conflicts of interest.

Wilson and Citywide have removed the term “independent” from their websites and Wilson and iSelect have removed the term from their marketing material. In addition, Wilson, iSelect and Citywide have all taken steps to review their marketing approval processes and have fully cooperated in responding to ASIC's concerns.

Wilson and iSelect both accept volume-based payments and commissions from product issuers in relation to the provision of financial services and advice. Wilson used the term “independent” to describe its business on its website and in a brochure that was distributed to consumers. iSelect used the term “independent” to describe its services in three marketing emails that were distributed to consumers.

Citywide is a corporate authorised representative of Suncorp Financial Services Pty Ltd (Suncorp). Suncorp and its authorised representatives may be remunerated through commissions. Suncorp also sets its advisors sales and retention targets in exchange for commercial benefits such as exclusive client services rights. Citywide used the term “independent” on its website to describe its' advisors.