In a statement released on Tuesday, the corporate regulator said it would provide the temporary relief to “assist the industry in providing consumers with affordable and timely advice during the COVID-19 pandemic”.
The relief measures included eliminating the need to provide an SOA when providing advice around early access to super, including when tax agents or in-house super fund advisers are providing such advice.
The measures are only available for advice where fees are capped at $300, the client has approached the adviser for advice and where the advice provider has established the client is eligible for early release.
The client would still need to be provided with a record of advice, ASIC said.
In addition, the corporate regulator said advisers would have 30 business days to give an SOA to a client, rather than 5 days, after time critical advice has been provided to clients.
Advisers may also give an ROA to clients where their personal circumstances have changed or where they are seeing another adviser in the practice rather than their original adviser, as long as the client is an existing client of the advice practice.
The regulator said it would conduct surveillance to monitor compliance around the new measures and would “consider market developments” when deciding when to revoke the relief.
A) We have just been pointing customers to the MyGov website and told them to do it themselves, we’re not touching that one with a 10 foot barge pole
B) Watch this space – ASIC will conduct mandatory reviews for any adviser engaging in this which will lead to the “[i]discovery of other breaches[/i][i][/i]” which will lead to more Under-The-Bus-You-Go adviser and licensee heads rolling.
Maybe ASIC should have spoken to the ACCC before issuing their ”industry saving” announcement – the below is straight off an ACCC ScamWatch News article re accessing super early due to COVID 19:
“The Australian Taxation Office is coordinating the early release of super through myGov and there is no need to involve a third party or pay a fee to get access under this scheme.”
Once again, left hand doesn’t know what….you know the rest!!
Dear oh dear, too late too little as usual . . . NEXT! . . .
I would be interested to see the difference in ROAs provided from an industry fund adviser and a fully fledged adviser. At our practice, our ROAs can be just as detailed as SOAs and with financial modeling included.
It’s a trap
“The advice fee, if any, is capped at $300”
Well played!
So, we still need to provide an ROA as long as the fee for the client is less then $300, well done ASIC, this once again allows us to give advice at a negative profit margin…Job keeper he we come!!!!……Brilliant!!!!
watch the industry funds morph from (self proclaimed) hero to zero when their liquidity dries up.
Industry Fund driven for sure
Who cares what’s driven it there is a chance it makes sense and ASIC May have the smallest chance to unwind some BS regs
Great idea which we’ve all been pushing for a long time. It’s just a shame they set the bar so low in terms of costs and complexity allowances that it will be mostly Industry Funds that are able to use it. Great idea, but as with most things coming from ASIC, poorly thought out and executed.
Given ASIC’s approach over the past 12 months how could you possibly trust them to overlook any perceived breach? Be extremely wary of relying on any form of common sense that might actually give consumers access to the advice when they need it as it will expose you to a game ending incursion from fully paid fully employed public servants
First sign of flexibility by ASIC, realising that their current systems are not working. A good start.
This is just a helping hand for Industry Super to stop withdrawals and that is all.
So true, the small chance that ASIC can back track a little on the complete and utter STRANGULATION OF BS REGS OVER 20 years of ever increasing compliance for compliance sake.
ASIC take what ever weasel words you want to change BS Adviser regs not just for COVID but for on going affordable advice.
Please ASIC come into the real world o e day.
Has anyone in ASIC ever sought and paid for real world BS over the top Regulated financial advice ? Ever on the last 20 years.
Try it one day ASIC people and see the freaking BS expensive regs nightmare you have created
AWESOME!! Now lets look at how we can keep common sense rules like this for advice where the firm is able to charge less than $500 for the service and has no product relationships or arrangements.
We know consumers want advice, we know that advisers are now banned from any payment or incentive to use a particular product and we know that their ethics charter requires them to act in their clients best interests.
NOW is the time to ditch complex and expensive rules that take good low cost, timely personal advice away from retail consumers and hide it behind a document that takes 10+ hours to make and costs thousands.
Hear hear!
Not sure why that was anonymous – I always put my name next to my big mouth – Michael Baragwanath
ha ha so effectively this is great for Industry funds. Good to see Industry Super has the ear of ASIC.
Always had ? their ear ???? both in fact!
Royal Commission and Industry Funds : Nothing to see hear move right along…
Why revoke the relief? An RoA contains all of the information necessary for consumers to decide whether or not to act on many different types of financial advice. Moreover, advisers are required to have adequate file notes to confirm their discussions with clients, not to mention act in the best interests of clients by law. As such, the need for an SoA is largely irrelevant in many cases, and is realistically a vestige of times gone by, that we keep doing solely due to an appeal to tradition, albeit with legal bindings. We no longer have volume bonuses or asset based fees. In fact the only product which still allows commission (for how long, nobody knows) is risk insurance. As such, why are we writing a gigantic document that most clients will never read. It is a monumental waste of time for all parties!
With respect to this temporary relief, could common sense finally prevail? Could we see the end of wordy, over-the-top advice documents intended for no other purpose than to satisfy the ever-watching regulator? The optimistic side of me hopes so, but the realistic side of me thinks not.
We write SoA’s (i.e. ACM’s….A#$e Covering Memo’s) purely to protect ourselves from vexatious, litigious “Why Not Litigate” mantra based regulators and lawyers.
True, but a decent file note and collaborating information should be more than enough to show how the advice was in the best interests of the client. I’ve long thought that SoAs were way too long (have been in the industry for 10 years, advising for around 8), but the fact that they are still the same length when the majority of reasons for writing them – i.e. sizeable conflicts of interest – no longer exist, makes no sense to me.
The time critical advice extension should also remain. Whoever decided on 5 days to provide an SoA from the day advice was provided clearly wasn’t living in the real world.
Just like any other change to laws, people often think that anarchy will result. Realistically, it will be business as usual, but we will be able to advise more clients for a lower price as it won’t be such an arduous task to do so. Ultimately, this benefits everyone!
Let’s hope. I have a glimmer of hope and it’s given me a lift of excitement!!
Bear trap for advisers! 😉
So a Clayton’s solution then……