{"id":28469,"date":"2015-01-20T13:50:41","date_gmt":"2015-01-20T02:50:41","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=28469"},"modified":"2015-02-04T07:12:15","modified_gmt":"2015-02-03T20:12:15","slug":"disclosure-soas-next-advice-battleground","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2015\/01\/20\/disclosure-soas-next-advice-battleground\/","title":{"rendered":"Disclosure, SoAs Next Advice Battleground?"},"content":{"rendered":"

The Association of Financial Advisers (AFA) has used its submission to the latest Parliamentary inquiry into financial advice to call for a review of adviser disclosure obligations, such as the provision of Statements of Advice.<\/span><\/p>\n

<\/p>\n

\"AFA<\/a>
AFA CEO, Brad Fox<\/figcaption><\/figure>\n

The Scrutiny of Financial Advice Inquiry, being undertaken by the Senate Standing Committee on Economics, was established in September 2014. Its purpose is to investigate the implications of financial advice reforms, focusing on current consumer protections and the mechanisms that have been employed to deal with inappropriate and unethical financial advice.<\/p>\n

The majority of submissions to the inquiry have focused on the work that has been undertaken by the industry to date to improve the quality of financial advice. In particular, submissions from Australia\u2019s \u2018big four\u2019 banks, AMP and Macquarie mostly contained reports on the progress of internal initiatives developed in response to earlier Parliamentary inquiries.<\/p>\n

However, one of the key recommendations put forward by the AFA to protect consumers from further misconduct is for the government to review the current disclosure obligations that apply to financial advisers.<\/p>\n

According to the AFA, SoAs are not serving the purpose for which they were established, because consumers are not reading them, or they do not understand them. SoAs were introduced to assist retail clients to understand, and decide whether to rely on, personal advice.<\/p>\n

\u2018We recommend that action is taken now to review SoA requirements to ensure that they can be more concise and can be effective in communicating key information to clients,\u2019 the AFA said.<\/p>\n

\u2018More effective SoAs will also play an important role in clients better understanding the advice they have received, the risks that they are taking, and the key issues that they need to consider before making important decisions.\u2019<\/p>\n

…an SoA has become an unnecessarily long compliance document…<\/h6>\n

Australia\u2019s two largest professional accounting bodies also called for a review of SoAs, and other disclosure requirements implemented by the 2001 Financial Services Reform (FSR) Act:<\/p>\n

\u2018The reality is that an SoA has become an unnecessarily long compliance document that an Australian Financial Services licensee and financial adviser use as part of their audit trail for protection from potential litigation. The flow on effect of these lengthy SoAs is the additional compliance measures to prepare the advice, which results in higher costs to provide the advice, yet the SoA does little to enhance the consumer understand of the advice they are receiving. This raises the question as to whether the SoA in its current form is delivering the disclosure benefits as originally intended for both the consumer and the advice provider…\u2019<\/p>\n

Submissions to the Scrutiny of Financial Advice inquiry have now closed. A report is expected from the Committee in July.<\/p>\n","protected":false},"excerpt":{"rendered":"

The Association of Financial Advisers (AFA) has used its submission to the latest Parliamentary inquiry into financial advice to call for a review of adviser disclosure obligations, such as the provision of Statements of Advice.<\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[282,8],"tags":[],"class_list":["post-28469","post","type-post","status-publish","format-standard","category-associations","category-compliance-regulation"],"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/28469","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/comments?post=28469"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/28469\/revisions"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=28469"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=28469"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=28469"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}