Even though most of the Dixons Advisory complaints are yet to be submitted, the CSLR has already allocated a $24 million bill to the industry. Good financial advisers will be forced to pay for the nefarious and neglectful acts of bad ones for years to come.
After years of regulatory turmoil and a violently shifting business landscape, the advice industry may be on the cusp of a relatively calm period. For advisers, this could be the right time to reflect, revise and even reset their business.
ASIC ‘neutral’ on SOA format, video statements good to go
The corporate regulator has confirmed that video statements of advice are an acceptable replacement for written versions as long as they meet the same compliance requirements, and clients retain the option to opt out if they prefer written formats.
Speaking at the Financial Planning Association’s national congress in Sydney recently, ASIC executive leader Leah Sciacca, who heads up the regulator’s advice team, was asked how ASIC felt about video SOAs.
The regulator’s starting premise, she explained, is that the Corporation’s Act is “technology neutral”.
“From an ASIC perspective, we encourage industry to explore technology and innovation that might lead to efficiency and benefit consumers,” Sciacca said, before adding that advisers need to ensure the same compliance steps are met regardless of the presentation format.
ASIC’s regulatory guide 244, Giving information, general advice and scaled advice, had the relevant detail on this stipulation, Sciacca added.
“RG 244 says regardless of the means in which you give advice and the form of the delivery of that advice, the same standards apply, so that that extends to the advice, conduct obligations, the advice needing to be appropriate and in the client’s best interest.”
It also applies to disclosure obligations of an SOA, Sciacca continued.
“So requirements [need to] be clear, concise and effective… regardless of the delivery mechanism, and the disclosure… those requirements are the same.
The executive director also pointed to RG 221, Facilitating digital financial services disclosures, which “sets out those same sorts of principles in terms of it needs to be easy to understand and inform the client”.
Asked by the FPA’s head of policy and professionalism, Ben Marshan, if ASIC would produce a regulatory guide specific to video SOAs, Sciacca was noncommittal. “We will look into that,” she said.
The FPA has been a strong advocate for video SOAs, with Marshan calling the issue of SOAs a decades-long “bugbear” for advisers.
“We have a vision at the FPA of of making it quick and efficient and engaging and cost effective to provide advice to clients,” he said. “And one of the things that we’ve thought a lot about is using video as a way to provide the SOA.”
To that end, the FPA has held a series of adviser workshops on using video SOAs in the lead up to the congress.
The issue of SOA formats may soon be moot, however, as the draft Quality of Advice Review proposal has put forward that SOAs should be abandoned in favour of records of advice.
