ASIC to release four more example SOAs
Creating another four example statements of advice (SOAs), including one with a “real fair dinkum super switch”, will be among the corporate regulator’s chief tasks in the year ahead, according to its deputy chair Jeremy Cooper.
Cooper told Money Management last week that the four extra SOAs written by the Australian Securities and Investments Commission (ASIC) would deal with a risk advice scenario, a basic share portfolio, a comprehensive financial plan, and a super switch, and would be released in a complete package.
Cooper said the documents were at the concept stage, and had only recently been suggested to the Financial Planning Association and the Investment and Financial Services Association.
“If it were agreed that this was a good idea, I imagine that you would see the results early in the new year,” he said.
The new example documents will add to the 12-page model SOA released by ASIC in late August, which dealt specifically with, what Cooper admitted, was a relatively limited advice scenario.
Nevertheless, he said the release of the 12-page example SOA was one of ASIC’s highlights for the 2004-05 financial year.
“Releasing the example SOA was reasonably significant, not in itself, but culturally it marked a big difference in the way ASIC did things. Instead of sitting on the sidelines and enforcing, we thought ‘let’s go in there and show a bit of leadership’.”
Other major achievements named by Cooper included assisting the Government with its 25 refinements to Financial Services Reform, and safeguarding the community in the new choice of fund environment through its super switching campaign.
Cooper said that the aftershocks of super switch were yet to be felt, with a number of individuals and planners still in line to hear from ASIC because of non compliance identified during the campaign.
In the year to come, Cooper said that ASIC would continue to focus on super switching in its ongoing shadow shopping project.
“Two real themes that came out of the super switching campaign were a lack of attention to the existing fund and, secondly, just plain inconsistency in the selling of life insurance to people who didn’t need life insurance at all, or were sold insurance well above the level that was required.”
He emphasised that ASIC would reserve its harshest penalties for instances where consumers had suffered a financial detriment.
“The real guts of [super switching enforcement] isn’t about complex legal criteria. There’s a lot of talk about section this and section that of the Corporations Act, but the results of the stuff we’re complaining about are basic things that really harm the consumer.”
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