BFPPG fights Govt for FSRA changes
TheBoutique Financial Planning Principals Group (BFPPG) is lobbying Government for changes to aspects of the Australian Financial Services Reform Act (FSRA) which it argues place small dealer groups at a significant disadvantage.
The BFPPG is arguing a case to Parliamentary Secretary to the Treasurer, Senator Ian Campbell, to amend laws on the issuance of statements of advice (SOA) under FSRA.
According to the association, the law as it stands favours “large product distribution shops producing non-tailored, press-the-button advice” at the expense of small Australian Financial Services (AFS) licensees.
In a statement sent to Senator Campbell, BFPPG president Bruce Baker outlined his fears that SOA requirements impact on “good, ethical advisers and their clients and significantly increase the cost of tailored and ongoing advice”.
The consensus in Baker’s camp is the requirements for ongoing advice will lead to excessive replication from one SOA to another, blowing out the cost of tailored advice.
“Product sales focused businesses producing simplistic advice will be able to continue to flourish, while those providing tailored advice will be relatively easy targets of vexatious clients and their lawyers,” Baker says.
Planners can be held civilly liable for losses by clients and face five year jail terms if found to have issued a defective SOA.
Baker says the only guideline for the level of detail required is “an amount that the person would reasonably need to act on as a retail client”.
“Different people will have a different view on what that means, which presents an immense business risk for advisers.”
However, Baker believes the chances of the legislation being changed are “good”.
Recommended for you
Money Management examines the share price of financial advice licensees over one year to 31 March, with M&A actions in the final quarter having a positive effect for two licensees.
A $3.5 million settlement for victims of Melissa Caddick has been approved by the Federal Court following an initial agreement last December.
The Reserve Bank of Australia has delivered its first rate decision since the introduction of a new board structure last month.
Digital advice provider Otivo has launched an interactive tool, powered by artificial intelligence and Otivo’s own advice engine, to help answer client questions.
