The compliance culture ushered in by FOFA has created SOAs stuffed with legal jargon that are incomprehensible to clients, argues an accounting and advice firm.
Speaking to ifa following a presentation at the Xerocon Sydney conference, Change Accountants and Advisors director and chief executive Timothy Munro said lawyers are pushing dealer groups to focus too much on compliance at the expense of clients.
“FOFA has hijacked everything, because people are focusing on fees and costs and compliance. The compliance requirements on people these days are just ridiculous,” Mr Munro said.
“A lot of SOAs you get from dealer groups have so much jargon [placed] in them by lawyers – not to help the client, but just to protect the dealer group,” he said.
Mr Munro said that because of the strong focus on compliance, consumers are getting lost among the long SOAs their financial planners are producing.
“ASIC model statements of advice go to 12 pages, and every dealer group’s [SOA] goes to 30 or 40 pages. My question is: Why is that?” Mr Munro asked.
“It’s the lawyers for the dealer group, and that is why the industry is just rocking and rolling because we have got all these supposed rules to protect consumers,” he said.
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