FPA to ASIC, re Statement of Advice proposal: Make it more user-friendly, and don’t lead with talk of fees

The Financial Planning Association of Australia broadly “supports” current plans to come up with a new “example Statement of Advice template” – about which the Australian financial regulator is currently consulting the country’s financial services industry – but says more needs to be done “to improve the customer experience”, including providing for a more user-friendly document.

In addition, while the FPA  describes itself as “very supportive of improved remuneration disclosure”, Ben Marshan, the organisation’s head of policy and government relations, said its members “do not think it is appropriate” to begin the SOA with talk of “fees and remuneration disclosures”, ahead of discussing the services on offer.

“We led with the FPA Remuneration Policy in 2012 to improve remuneration disclosure,” he added, referring to the FPA’s earlier efforts to contribute to an overhaul of the regulations governing the marketing of financial products and services to Australian investors, “and we recommend ASIC [the Australian Securities & Investments Commission] consider the ideas our members came up with in this [earlier] policy, rather than the front cover disclosure ASIC has chosen to lead with.”

“While a SOA is a disclosure document and not the client’s financial plan, it should still be aspirational,” Marshan said.

“It should help demonstrate the professional diagnosis process a professional financial planner undertakes, and how it will help the client achieve a better financial position through an implemented financial plan.”

‘More engaging delivery’

With respect to the general user-friendliness of the SOA template, the FPA noted that the SOA template currently being proposed “is a leap forward” from the previous example, but suggested “the use of icons, symbols, graphics, audio and video in the sample”, to “create a more engaging delivery of information to consumers”.

“As smartphone and tablet use make up 63% of total time spent on devices in Australia, ASIC should further consider how it can encourage the digital delivery of advice using mobile technology,” The FPA said, citing recent research data.

The FPA is the Australian affiliate of the US-based Financial Planning Standards Board. As such, it represents some 12,000 financial advisers and affiliates throughout Australia, and oversees the awarding of the CFP certification in the country, which currently has around 5,500 practicing, CFP-certified financial planners.

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