BFPPG calls for conflicts list on FSGs and SOAs
The Boutique Financial Planning Principals Group (BFPPG) is calling for a standard (one-page) document of conflicts of interest to be developed for inclusion on the front page of all Financial Services Guides (FSGs) and Statements of Advice (SOAs) distributed to financial services clients.
Its proposal was included in a submission to the Parliamentary Secretary to the Treasurer, Chris Pearce, on “clear, concise and effective disclosure of factors that might influence financial product advice under FSR [Financial Services Reform]”.
The BFPPG offered four proposals in its submission to overcome a “very major problem” in FSR compliance relating to disclosure of “factors which might influence” as required under Section 947B.
BFPPG compliance and FSR committee chairman Bruce Baker said in the submission that many of the “factors that might influence” advice are “not being disclosed in a clear, concise and effective fashion”.
“This seems to be a clear breach of FSR law, but this critical aspect of FSR law is not being enforced it seems.”
Baker proposed this breach could be overcome by developing a standardised disclosure document less than one page in length for inclusion in all FSGs and SOAs, derived from a list of factors that might influence advice.
The list of factors would have to be answered individually by all Australian Financial Services licensees and their authorised representatives.
It would be required to appear “on the front page of every FSG and on the front page of the first SOA that a rep provides to a client that has not been dealt with before”.
“This important proposal seeks to prevent “factors which might influence” the advice being buried deep in a FSG or SOA where a client is unlikely to find it, he said.
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