Easier SOA rules a step closer
New rules that could dramatically cut the paperwork burden for financial planers are a step closer after the Federal Government released regulations that aim to shorten the length of disclosure documents and bring much needed relief from cumbersome Statement of Advice (SOA) requirements.
Parliamentary Secretary to the Treasurer Chris Pearce released the draft regulations yesterday to implement proposed refinements to the Government’s Financial Services Reform (FSR) package first outlined in May.
The Government agreed to introduce the changes after heavy criticism that a clumsy implementation of the FSR rules was imposing an unnecessary compliance burden on the financial services industry, particularly on financial planners.
As part of the changes, advisers will no longer have to provide a SOA for information they give to clients following the issuing of the initial SOA — as long as the original basis of the advice does not change and there are no significant changes to clients’ circumstances.
Financial planners would instead have to keep a record of subsequent advice for seven years.
Other changes include allowing financial services groups to remove the more generic information from a Financial Services Guide (FSG) and tailor the documents to their specific products. Some information in FSGs that is duplicated in Product Disclosure Statements (PDSs) would also no longer be required.
Although the changes were aimed at easing the compliance load for the financial services industry, Pearce insisted they would have no detrimental impact on the protections that had been put in place for consumers.
“In developing both the proposals paper and the draft regulations, we sought to focus on the original objective for FSR: to help consumers make informed financial decisions,” Pearce said in a statement yesterday.
“The proposals paper recognises the importance of ensuring consumers receive information that is both concise and relevant to their needs. The draft regulations develop this further and will help financial services providers communicate clearly and effectively with clients.”
The Government will take comments on the draft regulations until November 4 before finalising the changes.
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