Parliamentarian calls 100-page SOA ‘absurd’

A parliamentarian has called the outcome of a 100-page statement of advice (SOA) after 26 hours of financial planning work to onboard a client as “absurd”.

In questioning the Financial Planning Association of Australia (FPA) during a parliamentary committee hearing, Liberal backbencher, Jason Falinski, asked what the result was after 26 hours of client meetings, data collection, investment strategies, and research.

FPA head of policy, strategy, and innovation, Ben Marshan, said the outcome was “a large, large, brick of paper”.

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“The reality of what’s in the Corporations Act which is what is required around providing financial advice there is not actually a lot in there. ASIC [the Australian Securities and Investments Commission] has provided in the past sample SOAs that cover off what the legal requirements are which are as short as eight to 12 pages,” Marshan said.

“What’s not covered in those SOAs is the fact that we’re regulated by eight different regulators. We have numerous complaints and disciplinary systems and processes that financial planners need to comply with.

“The only way a financial planner and their licensee can be comfortable to have a defensive position if there is a consumer complaint against them is to document something that is around 100 pages long to make ensure that every warning, consideration, recommendation is documented in such a way that if someone picks up that document, they can find a defines for whatever the complaint is.”

Falinski replied with: “You’re telling me that 92 pages out of 100 pages are just to satisfy lawyers?”

“Does that not strike you as not only absurd?” Falinski said.

During the hearing FPA chief executive, Dante De Gori, noted that the ASIC levy was not equitable or sustainable and would cost the industry.

“In any industry, if a cost or a fee was to increase by 340 per cent over four years that industry would be unsustainable,” De Gori said, and said the levy ranked highly in the concerns of financial planners and that the costs were ultimately passed on to the individual financial planner.

“We don’t believe the way the formula is calculated and the way it is dispersed is equitable and fair,” he said.

“We want that [the levy] to be reviewed. There are activities that we're aware ASIC undertakes that have nothing to do with financial planners, yet they are placing that cost on financial planners through his levy.”

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Whilst Advisers are the ultimate extreme of over regulation. Australian politicians and regulators in their Canberra bubble only know 1 thing = More Regulation at every turn.
The bureaucratic morons are killing us all with over regulation and it’s getting exponentially worse everywhere.
Advisers are the best example of how utterly stupid Canberra has become.

Correct, but at least the LNP senators like Falinski, Wilson and Brockman are attempting to alter this rubbish.

Don't forget Labor pushed for the Royal Commission, the ISA and ASIC swayed Hayne with their one sided 'reports' blaming us for all the world's ills (thank God COVID19 wasn't around then!) and an inept Hume & overly politically ambitious Freydenberg were happy enough to just run with public opinion.

At least these three guys are attempting to push our side against all the opposition in both the media, the parliament (yes, both sides unfortunately) and also very incorrectly, our own industry groups like AIOFP, Jo Son and similar ilk.

Overlooking all the shonky deals, misbehaviours and and professional wrongs disclosed by the Royal Commission? Why not blame the financial planning industry for being unprofessional and greedy and careless?

Wilson and his clowns are members of the very government that instituted the Royal Commission.

Overlooking the 'shonky deals, misbehaviours and professional wrongs' identified by the RC were almost exclusively related to institutions and that AFCA acknowledged and praised the financial planning profession for the lack of complaints, reported in this publication just 3 days ago.

Ah, Dickie boy! How I've missed your shrill lefty screech on this forum. Bit like my favourite little monkey toy I misplaced as a young boy, never realising the amusement it provided by its absurdity until it was temporarily gone.

Yes, we are all so much better off not only as a profession but a country after that amazingly astute, correct, unbiased, in-depth look at all aspects of our financial system and all the players within, with nothing but pure accuracy reported from the regulator, no vested self interest union super groups unifying to gain financial advantage, and clear commercially realistic actionable outcomes the core result.

As I 've said numerous times, must be amazing living in La-La Land with those red pixies, I'll have to come visit you sometime!

Keep up the comments, you provide a fun distraction, Richard.

The Royal Commission looked at the actions of 10 financial planners looking back 10 years, if you did that to every industry (e.g. accountants) you would also find some seriously bad behaviour. You don't make legislative changes based on the actions of an extremely small percentage of the industry. The worst parts for the Royal Commission concerning financial planning were really relating to corporate greed, with practically no punishment to those that perpetrators.

The planning industry had plenty of snouts in the troughs and the industry did nothing to self-police itself as it should have done as a professional body. You are correct is suggesting the corporates are much at fault. But almost every week in this publication is a report of a planner found wanting. If a comment was to be made, then it is more likely to be about another lost in the numbers of financial advisors.
Strange that there is never any posts condemning such behaviour when the planning industry should be doing its best to improve its reputation.

There are constant stories in the mainstream media condemning the behaviour of financial advisers. While some of these are true and warranted, the vast majority are misrepresentations and exaggerations which vilify the majority of honest ethical planners. They are the moral and factual equivalent of claiming "all Muslims are terrorists" based on the behaviour of a minority.

The posts by advisers on industry publications like MM are not trying to deny the poor behaviour of a minority. They are just trying to restore balance and accuracy to the despicable misrepresentations made by the mainstream media and commercial vested interests such as your friends in union super.

You are a bitter person - I still reckon working in Treasury.

Hahahahahahahaha! OMG, Richard, did you actually dare write the words "Strange that there is never any posts condemning such behaviour"??? That is exactly the phrase correctly levelled at you regarding your staunch unwavering defence of all things union super or politically labor based regardless of how bad their actions!!!

You're either brilliantly hilarious and a veritable comic genius joking with all of us, or else hopelessly hypocritical and lost that far up our own fantasy world rectal passage that you actually believe that somehow you're on the same side as the FP profession?

Or, perhaps more correctly as others have guessed, actually a labor stooge, ISA plant, IFM employee or treasury/ASIC public 'servant' - oxymoron if ever I heard one.

...and yet, some people think (and protest against) some silly little imposition like a lockdown. LOL

It is the MONSTER that the BROKEN SYSTEM has created. Over regulation by authorities because the Industry couldn't self regulate in the first place. Very sad that it has come to this.

Well said and 100% agree.

26 hours to onbooard? They are much more efficeint than me.

Yes, I also thought that was pretty efficient. I wish I could do it in that time.

The types of docs we need to give to clients:

FCF (fee consent form)
FDS (or SDS - service disclosure statement)

Through IDPSs, we invest in

All the funds have ICRs, MERs, etc

All this, not very inclusive to the poor clients with dyslexia or ADD, ADHD, etc

In all seriousness, in non-fiction genre, if a book is written at a level above than year 4-6, is it considered incomprehensible and not being published by the editor.

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