While certainty around superannuation, the life insurance framework (LIF), and increasing professional standards in advice remain priorities post the Federal election, there is a spate of other Financial System Inquiry (FSI) recommendations that demand attention.
Such was the view of the Financial Planning Association (FPA), and the Association of Financial Advisers (AFA), both reiterating that the Government must turn its focus to simplifying statements of advice (SOA) and disclosure documents, including digital distribution.
AFA policy and professionalism general manager, Samantha Clarke, said consumers continued to provide feedback that the industry was providing copious amounts of documents that were difficult to understand.
“Because they’re so large, customers don’t read them so that’s a concern for the industry,” Clarke said.
“In the second half of the year, we’re looking forward to licensees, insurers, wealth management companies, and advisers committed to clear, concise, and contemporary SOAs for the benefit of consumers.”
FPA professional standards and advocacy manager, Benjamin Marshan, said the Government must also focus on renaming ‘general advice’ to avoid confusion for clients.
“We don’t have a problem with what you can currently do under general advice but clients think they’re receiving advice that’s specific to them when they’re not,” Marshan said, echoing arguments presented in the FSI that the word ‘advice’ may mislead consumers into believing the advice was tailored to their needs.
He said the term ‘advice’ must be removed, and was aware of suggested alternatives such as ‘product information’ or ‘general guidance’.
He also called on the Government to clarify how the Australian Securities and Investments Commission (ASIC) would be funded given the cost implications for financial advice businesses.
“We want ASIC to have sufficient funding to do the job that they need to do but the funding model should be a fair model for financial planner businesses of all sizes,” he said.
“Small businesses shouldn’t have to out proportionally pay higher costs. Big businesses shouldn’t be given big discounts due to scale.”
