End of the road for Statements of Additional Advice

Today is officially the last day advisers can use Statements of Additional Advice (SOAA) as part of their advice process under the terms of Australian Securities and Investments Commission regulations.

On May 22 this year the regulator issued advisory AD09-92, in which it announced that Class Order 04/1556, which provided for the use of SOAAs, would be revoked on September 1, 2009.

This class order essentially created the SOAA, granting relief from the full Statement of Advice (SOA) as a means to simplify the “further advice” process where certain conditions were met.

The Class Order is that it has been superseded by subsequent regulation (Corporations Regulation 7.7.10AE), which relates to the creation of Records of Advice (ROAs), according to financial planning specialist lawyer Mark Halsey.

He said all licensees would need to consider how they provide “further advice” from September 1, 2009, and remove the SOAA document from their menu of choices.

Those licensees who have been using SOAAs will “need to adjust to the prescribed requirements” of the ROAs, which he said represent a simplification of the “further advice” process.

However, Halsey said he had seen a significant number of licensees who appear to be “not entirely comfortable” with the concept of only using ROAs as envisaged under the Corporations Regulation.

“Instead they would prefer to automatically provide some form of simple advice document, rather than merely hold the record of the advice on file, and only provide it if and when the client asks for the record at any time up to seven years after the provision of the advice.”