In its recent report, Accelerating Australia’s Economic Recovery, the FSC recommended the government implement a two-year temporary reform to allow the use of an ROA rather than SOA if consumers were seeking advice on specific financial issues.
“Scaled advice would be documented through a record of advice and allow a client to seek advice on a specific subject, such as the impact of a redundancy or a hardship withdrawal from superannuation,” the report stated.
The FSC said the proposal could build on initial relief provided to advisers in order to facilitate low-cost advice for consumers around whether they should access their super early under the government’s COVID-19 hardship scheme.
The council said the government could look to monitor the effectiveness of the reform by conducting a review midway through the two-year relief period.
“The advice provided under this program would also continue to broadly operate within the established best interest duty and be free from conflicted remuneration, which would continue to be prohibited,” the FSC said.
The FSC said improved ability for financial planners to provide scaled advice would have “economic and social benefits”, including consumers making improved financial decisions that could help get them on their feet quicker following the crisis, and reduced likelihood of such individuals being targeted by investment scammers.
The council also said better access to single-issue advice would reduce pressure on financial counsellors and the non-profit sector during the coming recession, freeing them up to focus on individuals with greater need.
The FSC is not an industry body which represents advisers. It represents product providers and therefore has no business in making comments on how advice should be provided when it is completely outside of its remit.
IFA, this is a completely useless article which adds nothing to reducing the complexity of providing advice.
I am the compliance director of a boutique licensee and the only way advice can be streamlined to for all regulations to be reviewed in this area and to remove the stupidity of simply adding more and more regulations without checking how these conflict with or duplicate existing requirements. This of course won’t occur while we have ASIC trying to kill off the Financial Planning profession as well as the totally conflicted Code of Ethics prepared by FASEA after being stood over by ASIC to make it in their desired model.
If the Opt In red tape process reverted to Opt Out, via the annual FDS, advisers would have ample time to do a reasonable number of Statements of Advice, whereby informed consent for ongoing service fees is authorised by the client.
Can someone plesase tell the FSC to go back to sleep. ROA or SOA – it doesn’t matter. You still need to do all the same background work and investigations.
wtf fsc your mob caused all these problems, now that business is drying up the cohorts on the fsc board Tal and the likes are all crying crocodile tears for the lack of business from OVER Regulation , you have to be kidding us fsc.
Herein lies the ongoing problem. A bunch of mostly product floggers trying to organise the lives of advisers again.
Overall it’s a good attempt to streamline advice.
But in reality most financial advice is inter wound into multiple areas and can’t easily be covered as a single advice issue.
Sure i can look at Life Insurance for Mr as a one of advice piece.
– If i include Mrs is that included as one off ?
– If i include Mr existing Life covers in his say two super funds is that included ?
– And how do i include Mr existing Life covers in Super without looking into his Supers ?
– If i recommend Life and TPD insurances is that single issue ?
– What about Life, TPD, Income Protection and Trauma, all to do with Life Insurance but multiple products ?
Given the largest super fund in the country = AustralianSuper refused to offer Intra Fund Advice around COVID early super release and also refused to offer the $300 capped fee advice too.
Clearly this was not a solution many advisers or Super Funds saw as a good option.
[b]The whole advice process needs to be restarted from compliance scratch.
1) Ban any vertically integrated advice and a lot of the conflicts disappear and thus so too do a lot of the massive over the top BS red tape compliance REGS and rubbish. [/b][b][/b]
This will not help at all because the ROA is as complex as a SOA designed by some dealer groups. What will help is to dismantle the whole FASEA regime and put in a sensible system like every other professional bodies. That will protect the consumer in a better way.
Dear Commonwealth Financial Planner. We don’t have any “professional” bodies.