- Yes (77%)
- No (12%)
- Not sure (12%)
A significant majority of advisers appear to support the proposal to remove the requirement for advisers to deliver written Statements and Records of Advice to their clients.
As we’ve reported, independent reviewer, Michelle Levy’s Quality of Advice Review Consultation Paper proposes the scrapping of SoAs as one of a number of solutions intended to address the complexity of the financial advice process, with the ultimate aim of making quality advice more accessible and more affordable to more Australians.
As we go to press, a resounding 75% of those voting in this poll agree with the independent reviewer’s proposal, with the remaining 25% evenly split between a ‘no’ vote and still deciding.
Where do you land on this question? Seemingly, the majority see the removal of written SoAs as a win for common sense, while maintaining professional levels of advice and conduct. But not everyone holds this view.
Those opposing the removal of written SoAs argue this move will lower the barrier to quality advice, to the ultimate detriment of the consumer, while those in favour believe sufficient controls and other compliance measures – which did not exist prior to the implementation of the Future of Financial Advice and Life Insurance Framework reforms – will be more than adequate to protect the consumer and to maintain a quality of advice outcome.
Our poll remains open for another week and we encourage you to add to the debate…
Sounds too good to be true doesn’t it. Scrap 35 Page risk SOAs and 90 to 100 page investment SOAs. Loads of chapter 7 amendments, all waived through by an obedient ASIC. Pigs might fly!!
I understand that the first thing that occurs when AFCA receives a complaint about advice is they demand the SOA. Usually after that they’ll demand the file notes. Come the promised revolution of QAR, there will be no SOA that AFCA can analyse in depth, so there had better be loads of very good FILE NOTES.
Hovering over the top of everything like an unwanted delivery drone over your backyard is Standard 5 of the FASEA Code of Ethics. It’s all about effective communication, or actually being seen to have a reasonable basis that your client actually understood what you words recommending product solutions and the basis of those recommendations. It has the potential to hang a lot of advisers, particularly when replacing products.
Post QAR, we will still need communication and documentation provided to our clients and in an understandable format. Some of us might do strategy papers, this time was premiums quoted and insurers nominated. We could also go back to the old two-page CAR of fond memory.
The general insurance industry essentially operates on 2-3 page SOAs. I don’t think we should abandon SOAs, just drastically reduce them and make them easy to produce . Maybe some of our clients will actually read a two-page risk SOA document.
Unless chapter 7 is grossly repealed, I cannot see ASIC letting go of their little baby dummy called commission disclosure. Remember the model risk SOA published by ASIC about 5 to 7 years ago – on the very first page, in big 24 point font, there was a notice boldly stating “This is the commission your adviser will learn”. Do we really want to go back to that?.
I really can’t get too excited with Ms Levy’s leaks to the compliant industry media, until we see the fine detail. But I know that Standard 5, unless amended, will still require us to communicate our advice AND the basis of our recommendations to the client in some form of written document, with commission and fee disclosure.
Well said Oldie! I’ve no doubt that any adviser facing the ombudsman in a risk matter could do worse than have you as his backstop in his corner 🙂 . . .hahaha, yep, that 24 point font was a mind blower wasn’t it?!! Just a truly ridiculous tax-dollar-wasting outfit ASIC, mind boggling.
So if we go from too much information wrapped up in a cocoon of Legal wording that protects the Adviser, Practice and Licensee, though is so long, protracted and expensive, that it is neither affordable, read by or understood by nearly all clients, then move to no SOA, though there is still proof required of, what in essence for Licensed Advisers, is still the requirement to provide advice and products that will not fall foul of the trimmed down Regulatory maze, then where does the risk mitigation for Advisers, Practice owners and Licensees come into play?
Not having to give out complex documents that cost a fortune, sounds great.
Standing in a Court and trying to explain why you did not comply with the OTHER hundreds of thousands of words in the Regulations and laws that are still confusing, will still be there to catch you out and using some file notes as evidence that could be dismissed as insufficient proof, is not a good position to be in, when you could lose your revenue, your Business and spend years paying hundreds of thousands of dollars to Lawyers who will use the grey fringes in the Regulations to vigorously defend you, while you can still afford to pay them.
In that situation, the end result is ALWAYS the same. Your Lawyers win. You LOSE.
Ask anyone who has been through that game and the answer is always, “As above.”
You lose control of your own destiny, as you become part of the legal process and legal interpretation game that is designed to legally part you from your money at a low rate of many hundreds of dollars an hour and if you think the guys building roads are slow and inefficient, then they are babes in the woods compared to the Legal eagles who can turn a 5 minute discussion, into a multi hour analysis. AT YOUR EXPENSE.
Yep, this realization, epiphany if you will, was part of the thinking when I decided to call it quits in Dec last year. Why on earth would a clear thinking adviser choose to continue to take on this mountain of uncontrollable risk to himself, his business, his family, when commissions were not even adequate to pay business expenses or the type of wage an adviser deserves for this stress and responsibility.
The deck is significantly stacked against the adviser. I very much admire the loyalty to clients, persistence and can-do attitude of those who remain. However, knowing politicians and looking at their record of arrogance and dismissal of facts to feather their own nests, I honestly can’t see a future for the risk adviser past 2025 at the outside. Get a good price from a ‘full service’ financial planner/investment adviser with a fee income, sell up and get your life back – you deserve it.
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