ASIC issues new SOA class-order

By Craig Phillips

The Australian Securities andInvestments Commission (ASIC) has issued a direction on the issue of Statements of Advice (SOAs) by releasing a new class order to facilitate shorter SOAs for planners providing incidental advice.

Where there is an ongoing relationship with the client, advisers can simply provide investors with a Statement of Additional Advice (SOAA) through a new class order [CO 04/576].

The class order permits additional statements to ‘incorporate by reference’ elements of the information the client has already received in a previous SOA.

“[It] will benefit consumers and industry by facilitating the provision of shorter disclosure documents. This promotes the objective of clear, concise and effective disclosure,” ASIC executive director of financial services regulation, Ian Johnston says.

The move was well received, with the Financial Planning Association (FPA) backing it, saying it eases some of the post-FSR burden on advisers.

“The guidelines will help financial planners to produce shorter and more consumer-focused documents without compromising the accuracy or completeness of the information provided to clients,” FPA chief executive officer Kerrie Kelly says.

ASIC expects an SOAA to inform clients that it must be read with the original SOA; contain the new advice provided since the original SOA; highlight any changes since the original SOA; and repeat any required warnings and additional information required if recommending a replacement of one product with another.