While measures taken by ASIC earlier in the year to simplify financial advice were a step in the right direction, advice needs to be more available and affordable if the government wants Australia’s economy to grow, said SMSF Association chief executive John Maroney.
“The financial advice sector will play a crucial role in helping many Australians and businesses recover from this economic crisis, so it’s more important than ever that the government commits to reform,” Mr Maroney said.
He believed the recovery period provided an opportunity to “rethink and design” the professional advice framework, including the provision of “strategic advice” that is decoupled from products and “scaled advice” that would allow broader access to advice for consumers on how to structure their financial affairs.
“This is critical because consumers find that advice comes in an ‘all or nothing’ package, demonstrated by the fact temporary relief was required just to ensure someone simply wanting advice on taking money out of super under the COVID-19 relief measures did not have to pay for a comprehensive statement of advice that is both time consuming and costly,” Mr Maroney said.
“The reality is professionals have little room to move when asked to advise on a specific issue, illustrating just how many barriers they confront in providing efficient and affordable advice.”
Red tape is also leading to a lack of information for advisers who need to provide advice based on “myriad complex caps, thresholds and balances”.
“Registered tax agents are able to get information from ATO portals but cannot provide superannuation advice, while financial (tax) advisers are unable to get information yet are the advisers authorised to provide advice,” Mr Maroney said.
“This jeopardises the quality and efficiency of advice that is being provided.”
I have just completed a stock standard risk SOA. Life, TPD, IP, Crisis. 38 pages. Absolutely insane. My theory is that it actually puts clients off – they think you are attempting to baffle them with overly lengthy bs.
Until they get rid of the ridiculous over complicated compliance riddled SOAs nothing will change
ASIC and Pollies happily living in their Canberra bubble must honestly think that ever increasing, on top of ever increasing BS Red Tape Regs will fix everything.
As that is all the ever do, increase the Regs, increase the Red tape, increase the costs with Zero real world benefit.
Drain the Canberra swamp and start again.
Can someone please remind we why we need SOA’s? With super and investment commissions gone and conflicts banned by FASEA, surely we can do away with these expensive documents that clients do not want. No other profession is required to produce them. I thought FASEA was introduced to put us on par with other professions? If you have passed the exam, completed the study, are not receiving a commission for the advice and are not employed by a product provider, then the requirement to produce an SOA or ROA should be waived. That will lower the cost for consumers and provide an incentive for advisers to get on with the exam and studies, and maybe even provide an incentive for some to stay in the profession
We’ve been crying over this for years, with no support. That’s because thousands of compliance staff and paraplanners would be without a job. On the other hand, they could be re-deployed into areas of the business that are more useful, like servicing the client for example.
Not to mention all the Lawyers at ASIC that would be out of work more to the point.
Legislation should be implemented to set a maximum of say, 3 pages for a SOA and clients should be forced to successfully complete an exam on their SOA. This will prove “informed consent”.
Remove the current SOA format for a one page outline of the advice, this is what consumers want (and advisers can implement quickly on). We can have supporting comparisons/projections on file.
We are still bound by best interest duty (and we want to do the right thing by our clients anyway) so please let us get on with it.
Meanwhile the FPA is saying the Intrafund advice is wonderful & doing absolutely nothing about removing the Opt In on retail advisers. In the meantime advisers providing personal advice under Intrafund & to Wholesale investors have no such red tape imposed on them. Enough is enough!
That is because those super funds have replaced the banks. The FPA has grown on the back of selling out individual planners in return for being the puppets of large insto’s. It’s amazing what one large cheque and list of advisers names will buy you. So don’t expect anything but the FPA to be the voice of a some large firm that has 400 call centre advisers working for them, all with membership fees paid in bulk.
They are doing plenty. What do you think individual adviser licensing is about?