SoAs ineffective at engaging consumers: ASFA

The cost of providing a Statement of Advice (SoA) to superannuation funds members can be as much as $2,200 higher than a Record of Advice (RoA), according to the Association of Superannuation Funds Australia (ASFA).

In the association’s submission to the Quality of Advice review, ASFA said the average cost on-charged to a super fund member for an SoA was $1,500-$2,500. This compared to $300-$500 to provide a RoA.

While ASFA acknowledged the value of a SoA, it said it was “not always an effective means of engaging with a consumer” in relation to advice.

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This was because SoAs could be lengthy documents which consumers found hard to understand because of their detailed content.

It recommended certain advice topics were addressed through an RoA or simplified advice document rather than an SoA. A templated RoA could be provided by the Australian Securities and Investments Commission (ASIC) to ensure consistency.

“We expect this will reduce the cost of receiving advice and allow for shorter, more targeted disclosure about the advice that is easier for consumers to engage with.”

It would also have the benefit of reducing time spent by funds on explaining disclosure requirements to members.

“ASFA members have indicated that the first 10-15 minutes of a simple phone-based appointment for intra-fund advice is typically used for the adviser to go through the various disclosure requirements. Given that the consumer in this scenario is an existing member of the fund and will not be directly charged for the intra-fund advice, some relief in this area would be appropriate.”

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How about no. How about every 'financial adviser' is held to the same standards?

Except RoAs are basically now SoAs.... I cant see RoAs saving much time at all.

A $2500 soa from a fund will be heavily subsidised, so its not a true cost of advice. Gotta love the old its free as everyone pays for it indirectly, good business plan , it destroys the true value of advice and at the same time the fund gets to pay its advisers by simply skimming a tad more from the member fees. What a rort

We'll have achieved little if this is allowed.

Product providers offering advice solutions should be the last group of interested parties to have their opinion heard.

Oh yeah - in a world crying for an uplift of professionalism, lets make a system where your riguor and demonstration is contingent on whom your employer is.....

You've got to be kidding right?

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