Why is the paperwork to invest $25,000 100 times more than the paperwork for a major medical operation?

Everyone seems to be making submissions about the cost of financial advice and how it needs to be reduced to a reasonable amount so that people can afford to receive good advice.

I’m 100 per cent for this. Over the past two weeks I’ve had four client review meetings where my clients have expressed their extreme anger to me about the stupidity of all of the paperwork and fee disclosures that we keep sending to them – all supposed to “protect” their interests.

They know it’s not my fault, but they feel so frustrated by what they need to do to receive our advice that they want to express their feelings but they don’t know anyone who will listen except for me. I feel for them – but I need to bombard them with paperwork so I can keep my authorised representative status.

My current dealer group is absolutely brilliant and this article is in no way a reflection on them, but as we all know it’s an easy thing for ASIC to wipe out any financial adviser’s livelihood if their files and disclosures aren’t 100 per cent perfect. I’m watching this space with keen interest – and this will definitely be a topic I will write about in a future article.


Here is something that my family has recently experienced and it shows just how incredibly wrong the people are who make the rules that affect us as financial advisers:

Last October I had a major sinus operation. My broken nose (from a touch football collision 20 years ago) was fixed and my sinuses were cleaned out. After I was given a pre-med (similar to two double scotches) and while I was lying on the bed about 15 minutes before they rolled me into the operating theatre, the doctor met with me to run through his “Consent for Treatment” form. After he spent one minute reading it with me, he asked me to sign it. That’s it. That’s all the paperwork for risk disclosure.

One piece of paper with one signature. While I was drowsy. Wow!

I had a very serious operation with an overnight hospital stay. I had a major bleed after waking up in the recovery room and my blood pressure went through the roof and I had to be given emergency blood loss treatment. That night I didn’t sleep and the pain in my head was phenomenal. It took me weeks to recover. 

The operation fixed the sinus issues I’ve had ever since I was five years old and I’m so happy I had it. But the full risk disclosure was just one page – and I signed it after having a pre-med 15 minutes before my operation! A few years earlier my wife had a hysterectomy. Similar situation – simply a onepage document that she was asked to sign while drowsy after being given a pre-med – and just 15 minutes before her operation.

Both my wife and I were 100 per cent happy with this because we had an initial meeting with each of our doctors and they verbally explained the risks to us and we asked our questions to them. Nothing was signed during these initial meetings. We were responsible for our decisions.

Contrast that with the ridiculous paperwork a financial adviser has to provide to a client who wants to invest $25,000:

1. Financial Services Guide (FSG) 2. Client Engagement Agreement 3. Statement of Advice (SoA) or Record of Advice (RoA) 4. Ongoing Service Agreement 5. Investment Application Form with Fee Consent 6. Product Disclosure Statement 7. Fee Disclosure Statement (FDS)

Fees repeated at least six times. Risks restated multiple times. Jargon and legal words that clients know are not there to protect them but only designed to protect their adviser’s dealer group.

Given that our society has shown it’s acceptable for one page to be signed to acknowledge the risks of a serious (and maybe life threatening) medical operation as opposed to hundreds of pages of multiple documents that a client is expected to read and sign just to invest $25,000 – can’t the government urgently take steps to fix this ridiculous situation?

Next article I’ll outline my solution for this problem. Maybe I should give my clients a double single malt each time I need them to sign off the documents for my advice!

Important: So no one gets upset, this is the personal opinion of Timothy Munro, and Timothy is not speaking on behalf his dealer group or his professional accounting body!

Why is the paperwork to invest $25,000 100 times more than the paperwork for a major medical operation?
Timothy Munro
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