On Thursday, Financial Services Minister Stephen Jones welcomed the Joint Associations Working Group (JAWG) in Canberra to discuss the government’s new roadmap for financial advice reform.
“It was a great chat this morning on how these reforms will ensure Australians have access to reliable and affordable financial advice,” Mr Jones said on his LinkedIn profile.
Speaking to ifa following the meeting, Sarah Abood, chief executive officer of the Financial Advice Association Australia (FAAA), said a clearer understanding of what the consultation timeframe will look like will become known in the next fortnight.
Overall, she described the interaction with the minister as “really positive” and added that a “lot of deep conversation” about the Quality of Advice Review (QAR) was had.
“The feeling is great. The minister is clearly understanding the concerns that the profession has raised with all of the red tape and bureaucracy and so on, and probably the best news out of that for us is that he really does recognise these are urgent to solve and he is really keen to prioritise them,” Ms Abood said.
“That’s music to our ears, obviously, and we’ll be working with him very closely on getting those quick wins into drafting and across to Parliament as quickly as we possibly can.”
She confirmed that changes to statements of advice (SOAs) will be consulted on right off the bat.
“What we’ll do is try to ensure that changes that are not controversial, that are broadly agreed, will be grouped up and put through as quickly as possible,” Ms Abood said.
Those more contentious issues, she assured, won’t be delayed.
“He doesn’t want to see those changes delayed so that’s very much in line with what we’ve been advocating for very consistently since the start of this review.”
Mr Jones unveiled the government’s response to the QAR to a small audience of superannuation fund CEOs and senior industry executives on Tuesday.
In it, he confirmed the government will accept 14 of the 22 recommendations made by QAR lead Michelle Levy, while consulting further on the remaining eight.
The government’s legislative response to the QAR will be divided into three streams, he also said, with stream one set to prioritise recommendations deemed as crucial for advisers, including the removal of fee disclosure statements and the redesign of SOAs.
While advisers welcomed these particular announcements, some concerns were raised around the government’s intentions to consult further on the new look of SOAs and potential delays.
great to see SOAs gone .. imagine trying to get another profession to produce these ridiculous documents … be nice to reform AFSLs next – remove need for relevant providers to be licensed.
Imagine you giving advice to a client and no SOA. How do you think AFCA, P.I. and ASIC will see this. How do you think your Head Of Compliance view this.
No AFSL should agree to no SOA’s. But a cut down version with all warnings, disclaimers in the FSG. That’s the only way out.
You want to educate your clients and also want to protect yourself, your brand, your AFSL and practice.
Totally agree. I doubt any insurance provider will offer PI cover if some kind of SOA isn’t offered to a retail client…
If you are concerned about risk management issues (your comments about the PI insurer, ASIC and AFCA) the critical element is obtaining WRITTEN evidence that the client has READ and AGREED to the advice. That is typically obtained in a well drafted “Authority to Proceed” form included in an advice document that is signed by the client and returned to the adviser. Going forward you can call an advice document an SOA or anything else, but it must be in writing and signed by the client if there is any hope that it will be effective in terms of risk management. Otherwise an adviser is open to the allegation from the client that the client did not obtain or understand the advice or understand the risks involved in the advice.
Those people who think that merely having an internal file note sitting on the client file in the adviser’s office will somehow sway ASIC or AFCA into accepting the adviser’s version of events versus that of the client in the event of a dispute are really kidding themselves.
Does your accountant, lawyer or doctor give you a SOA when they provide you with advice?
When last did your GP / Lawyer / Accountant have to provide a document justifying their recommendation? Or, are they justifiably absolved from this tedious task because they are widely recognised as a profession? (unlike us?)
There’s a clear trail and timing of fact find risk profile research and modelling, file notes and engagement letters prior to all of it being restated in an SoA. I believe this is what considering the whole file is about.
No SOA (in its current form) is not the same as no documentation.
Also re the Head of Compliance, they are part of the problem, not part of the solution.
Lawyers, doctors and accountants seem to get by ok without worrying about a dealer group or ‘head of compliance’ overlord. I have also never received an SOA from any other professional. FASEA was supposed to raise us up to be professionals, so why are these leaches still holding us back? If Levy wasn’t so blinded by the interests of her institutional clients, she would listened to advisers and the FPA/FAAA and recommended scrapping dealer groups. They are hated almost universally by financial advisers and ASIC has also agreed they are a significant part of the red-tape problem. The sooner they are gone the better.
who cares.. its not really a concern if its not required by law … the whole point of this review is to ultimately remove the need for AFSL and individual firm based compliance period…
So no more nagging or ‘Jawging’ him, that is a relief to Jonesy I bet. Why bring all these non industry Associations to the table?
The FPA , and now FAAA, seem incapable of ever saying a bad word against the government.
Their job is to hold government to account over the diabolical shambles which the financial services industry has become.
The FPA / FAAA are simply incapable of this.
Are you complaining about the QAR outcome, which surely is good for advisers and the overall advice profession, or are you just having a whinge, because that is what you like to do? The QAR Government response is one of a few key breakthroughs that reflect a fundamental change in the momentum. Everything and everyone was against us as a result of the Royal Commission. That is now turned around and the regulatory change momentum is definitely positive. Let’s support those who are working to make a real difference.