The corporate regulator has announced it will apply a commonsense approach to the rules governing the proper issuance of Statements of Advice (SOAs) in the lead up to the simpler super rules so as to ensure retail investors do not miss out on receiving advice regarding their retirement savings strategies before June 30.
The announcement has come as a result of feedback from various industry associations that alerted the Australian Securities and Investments Commission (ASIC) to the fact that many consumers would not receive advice about their superannuation strategies regarding the new rules due to time constraints if the standard period for providing a SOA was adhered to in the lead up to June 30.
ASIC’s relaxing of the rules mean financial planners in these circumstances have 30 days to issue a SOA to a client as opposed to the normal five days.
The relief for planners comes by the way of Class Order CO 07/447 Temporary Extension of Time for SOA Delivery, which is effective from June 18 to June 30 of this year.
Outside of the timing relating to the issuing of a SOA, all other regulations regarding advice remains unchanged.
In addition, financial planners providing advice relating to the simpler super rules must give written notification to clients that they may not receive a written SOA in time to assist in making subsequent investment decisions.
Both the Financial Planning Association (FPA) and the Investment and Financial Services Association (IFSA) have welcomed the regulator’s new initiative.
FPA chief executive Jo-Anne Bloch said: “Our members have been working up to 70 hours a week in order to help thousands of clients take advantage of the Federal Government’s new superannuation regime.
“We are pleased that ASIC has acknowledged the special circumstances the transitory arrangements have imposed on the financial planning profession. Australians need good advice now more than ever, and such moves to help planners meet the current demand are most welcome,” she added.
IFSA chief executive Richard Gilbert applauded ASIC’s flexibility in this situation.
“Clearly, there is pressure building in the advice space and it is imperative that people have access to financial advice in the lead-up to June 30,” he said.
Gilbert summed up: “This is a case of ASIC using its market facilitation mandate with powerful effect for the benefit of all market players.”
