Nick Topham of Clique Paraplanning has spent the months since ASIC unveiled its example SOA running his ruler over the document and has concluded the regulator’s approach has some serious issues.
“It’s rubbish, basically,” Mr Topham told ifa. “I have been through the whole thing in detail and believe it will be incredibly confusing for clients.”
In particular, he questions the structure of the draft SOA and ASIC’s decision to focus on remuneration so early in the document.
“Commissions and fees appear on the front page of the document – no adviser should be telling a client how much they are being paid before they even outline the scope of the work or the value of the advice,” he said.
In addition to ASIC’s preoccupation with fees, Mr Topham suggested the regulator has been consulting with the “wrong people” – licensees and associations instead of practising advisers.
“ASIC semi-discloses who they have been consulting with, listing the FPA, AFA and FSC, rather than businesses who actually provide these documents,” he said.
In addition, Mr Topham said he had detected a strong similarity between ASIC’s draft and the templates used by a number of institutionally-owned dealer groups, with which he is familiar.
More broadly, he said providing consumers with sensible advice documents that make sense to them is vitally important.
“I reject the idea that you can just lump clients with any old document,” he said.
While this is only a consultation paper, Mr Topham said the paper clearly indicated this is the structure ASIC would like to see advisers adopt.
He called on concerned advisers to engage with ASIC during the consultation process so as to help ensure a preferable outcome.
University degrees in financial planning go back a long way; before 2000 in fact, so whats the fuss about when they become the desired qualification.
I wonder these dills in ASIC when they get their home and contents insurance is that the 1st thing they do is look for the commission that the broker gets or the content of what the actual insurance cover and the quality of what they have paid for?
There is a desperate need to bridge the gap between the ivory towers (ASIC/Canberra/Universities). We need to have a serious look at what is best needed for the man in the street. There are several thought leaders out there – these should be the starting point (as opposed to the ‘armchair generals’ who would not last a day in the trenches despite their fat pay cheques and 4:00Pm knock off times!!). Terry McMaster from Dover comes to mind – I have no affiliation but have a great deal of time for his ideas. Time for a one page financial plan. All the money being thrown at this could be far better used. We are going to end up with a whole lot of additional education, levy and other fees which are just another tax – with no real benefit.
My Lord . . . talk about adding insult to injury. Not only do we have to put up with this abject rubbish attempt by ASIC to prove it is still relevant (SoA ‘improvements’ – I feel ill) but now we learn we each must help a little each year to pay their outrageously ridiculous wages they take home for hindering our businesses each day. AFSL and advisers can now help fund ASIC – wonderful.
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Can anyone PLEASE tell me why I shouldn’t stop writing business and live comfortably on my renewals until I retire. All too hard. Really need some input on this at this point when I see these self-serving govt clerks doing this to our industry.
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Client ‘best interest’ is a joke nowhere more so that in the eyes of ASIC. Just look at the evidence in the ‘new’ SoA. This is ludicrous beyond words.
Oscar Wylde defined a cynic as someone who sees the price of everything and the value of nothing. Sums up ASIC’s approach.
There is a hidden agenda. Scare clients away from getting advice. The goal is remove financial planners totally so union industry funds and product manufacturers can get on with flogging their products to the masses through direct channels. The corruption in the industry goes right to the top.
At least the ASIC draft SoA had client names spelt correctly throughout the document, unlike so many advice documents that I have reviewed over the years.
That’s probably the only thing it has going for it, I think you need to lift the bar a bit.
I just finished a 40 page SOA. It had 12,603 words with the client’s name mentioned 55 times. If there are a few spelling errors, I am sorry. But I doubt my clients will ever notice. He is an engineer and she is an accountant. They are smart people and normally very thorough. But they gave up reading these crappy, long-winded, repetitive, disclaimer-ridden, ass-covering, costly, ASIC mandated, compliance documents long ago.
Tom I regularly write SoA’s double that size and the master templates are configured that you only need to enter a client’s name once and it populates the entire document. Nothing fancy, just word and excel stuff, it’s about getting the basics right n the first place
If you are regularly writing 80 page SOAs, there is something seriously wrong.
I would suggest in this day and age if your not writing 80 page SoA’s then something is wrong.
ASIC have been asleep at the wheel, and as such have much to prove, so they are (IMHO) looking for scalps to prove their worth. this kind of “trickery” is unbecoming and will drive advisers away from the business and push fees up . people who once were able to get advice via a mix of commissions and low fees , will be priced out of the market. one has to assume not even KO’D is that stupid to not understand this…… but then she didn’t even know we have been disclosing fees and commissions for years.
so with the LNP and ALP having a Bro’mance over Financial services reform, there is little hope for the adviser to have their voice heard in nay meaningful way.
and the final line of your comment is the most important, ” [i]little hope for the adviser to have their voice heard….” [/i] what chance have we got when the big institutions are funnelling millions and millions of dollars to the politicians to make the rules that we must all abide by. over time, these rules will revert to normalcy but what will happen to all of us who do the right thing and want to do the right thing in the interim? exactly, we become extinct. Good luck dear friends. If this enrages you then please voice your comments. let’s unite in our efforts to defeat the powers that may be in the interest of our profession and the community at large.
Umm… If Fees are so important, there is a contents page to refer to?
Even if you use their template they will find fault when it suits them and get you with the “Best Interest Rule” which is the most subjective piece of legislation imaginable, we the advisers are the low hanging fruit that they are persecuting and pursuing.
that is the issue for most honest advisers and the fact that our livelihoods and our reputations are subject to the whim of a regulator and most of whose decisions would be subject to challenge under common law but who is there to do that for the sole adviser. Let me quote Romans 3: 9- 18 “no one, there is none, not one who seeks on our behalf there is no one righteous, not even one there is no one who understands; there is no one who seeks to understand our plight. All have turned away. they have together become worthless; there is no one who does good, not even one. Their throats are open graves, their tongues practice deceit. The poison of vipers is on their lips.Their mouths are full of cursing and bitterness.Their feet are swift to shed blood; ruin and misery mark their ways, and the way of peace they do not know.There is no fear of God before their eyes.”
hahahahahaaaa!!! WOW!!! Love THAT!! Go girl! The more things change the more they stay the same eh?!
I love the passion and I agree wholeheartedly. However I won’t be wasting my time trying to ‘engage’ with ASIC. I lost confidence in our regulator a long time ago. Under the current regime, I don’t think they have any interest whatsoever in consulting with practicing advisers on any issue. But I wish Nick (and any others who wish to try and knock some sense into that organisation) the very best of luck.
I agree it’s difficult to write a fairly detailed response to ASIC (so far at 20 pages) when I too am very sceptical of their willingness to accept advice from anyone actually involved in the SoA process.
As someone who is directly involved with trying to improve the standard of risk SoAs, I feel that we have to at least try to hold them to account, however fruitless that may be. What they have come up with so far (which took them 18 months) is not suitable for presentation to clients and I fear may be adopted by some dealer groups as a “compliance” measure.
ASIC sitting in their Canberra Disneyland as usual.
ASIC what ever happened to CLEAR and CONCISE.
A very confused and costly regulator that we now fund directly for this rubbish.