ASIC issues new ‘statement of advice’ guide for advisers and insurers

The Australian Insurance and Investment commission (ASIC) has released a new example Statement of Advice (SOA) guide for life insurance companies and financial advisers working in the Australia financial services marketplace.

As part of updates to it its Regulatory Guide 90 Example Statement of Advice: Scaled advice for a new client (RG 90), ASIC has released an example for those working within the Australian life industry to follow.

The example SOA in RG 90 is designed to assist advisers to produce an SOA that is “compliant, concise, easy to understand”, and written in plain English. ASIC said.

The design is based on behavioural research into how consumers read and understand the information in SOAs. Following a public consultation, a draft of the example SOA was revised based on feedback and a subsequent roundtable with representatives from key financial advice industry associations.

Acting ASIC chair, Peter Kell said the new example SOA has been designed to “balance the interests of consumers with minimising regulatory burden” on advisers with the marketplace.

‘Fundamental tool for advisers’

“SOAs are a fundamental and important tool for an adviser to communicate their advice to the client,” said Kell.

“We appreciate the feedback we received on the draft example SOA and have taken it on board in finalising the guidance.”

The updates to RG 90 and the example SOA have arise from the Australian government’s incoming life insurance advice reform package. As part of these reforms, ASIC was asked to consider how to improve consumer understanding, and adviser use, of SOAs. Consideration of prominent, upfront disclosure of commissions in SOAs was a component of the review brief.

The guide, attached here, is specifically for Australian financial services (AFS) licensees, authorised representatives and advisers who give personal advice to retail clients, ASIC concluded.

Gary Robinson
Head of Video and Ezines at Open Door Media Publishing. Deputy Editor, International Investment. An experienced journalist and filmmaker with more than 20 years' financial services experience, both as journalist and originally as a fully qualified IFA, Gary works across both International Investment and InvestmentEurope titles. Previous video production credits include projects on BBC, C4 and SKY.

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