Industry bodies to help with model SOAs
Industry groups have responded favourably to their possible involvement in the formulation of four additional example Statements of Advice (SOAs) the Australian Securities and Investments Commission (ASIC)
ASIC deputy chair Jeremy Cooper told Money Management last month that the additional SOAs would deal with a risk advice scenario, a basic share portfolio, a comprehensive financial plan and super switching.
The SOAs will add to the 12-page limited advice model SOA ASIC released last September.
But this time, rather than putting the example documents together themselves, Cooper said ASIC would get the Financial Planning Association (FPA), the Investment and Financial Services Association (IFSA), and the Securities and Derivatives Industry Association (SDIA) more heavily involved in its drafting.
“This is an issue that needs to be addressed,” said IFSA chief executive Richard Gilbert.
“We need to get a system that will allow planners to give good advice, without too much red tape, for people who have got smallish to medium size balances. Until the regulator and the industry get on the front foot together on this we won’t be able to do that. Once we make a decision and commit to some meaningful dialogue I’d expect some good outcomes,” he said.
The FPA is keen to contribute to the process but felt other issues needed to be resolved before any further meaningful work could be performed on improving SOAs.
“It’s going to be difficult to speak entirely about the direction of SOAs until the FSR [Financial Services Reform] refinements have been finalised. The reason being the significant change issue. Until that has been finalised, it’s hard to really speak about SOAs because it will change how the initial SOA is prepared,” an FPA spokesperson said.
The industry groups were also planning to enlist member input as part of the process both at a committee level and an individual level.
“We’d definitely give our input and we’d definitely be releasing it in consultation with the industry. What we do is put together working groups that are taken from the industry and then put together a submission,” said SDIA managing director and chief executive David Horsefield.
ASIC had indicated it would like to release the new examples early in the new year and the industry bodies believe this timeframe is realistic.
“If the regulator and the industry have a will there’s always a way to produce things in an expeditious way,” Gilbert said.
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