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Few financial planners appear to be fully embracing the Financial Planning Association’s (FPA’s) latest short-form Statement of Advice (SOA) sample, despite high praise for the FPA leading the way on the issue.
However, some planners are incorporating elements of the eight-page (investment) short-form SOA released last year into their documents when these come under review.
WB Financial general manager Glenn Pearce said the dealer group believes the “jury is still out” on the FPA’s short-form SOA and it has not adopted it as yet.
“We’re concerned that the FPA is asking us to take it on trust that we don’t have to include all the minutiae of the associated risks in our disclaimers.
“It hasn’t overcome our fears of client claims against us and we continue to put absolutely everything in our SOA’s to protect ourselves from a professional indemnity insurance perspective.”
He said a catalyst for a change of mind would be a “declaration of wholehearted support” for the short-form SOA from the Australian Securities and Investments Commission (ASIC) or a test case in the courts.
FPA chief executive Jo-Anne Bloch said she would “like someone to show me evidence of where a [professional indemnity] insurer or policy says that a short-form SOA that is fully-compliant with the law breaches any rules and regulations”.
She said ASIC had worked very closely with the FPA on the short-form SOA, but acknowledged it “cannot endorse it, just as we can’t endorse it, because an SOA is a reflection of the relationship between the client and the planner”.
Financial Wisdom general manager Tim Browne said the dealer group recently launched a new SOA template that has “incorporated several aspects of the FPA’s short-form SOA”.
“The short-form SOA provided a valuable reference point during the development of our advice document and helped us to achieve a significant reduction in length,” he said.
