FPA seeks SOA exemption from ASIC

TheFinancial Planning Association(FPA) is seeking to obtain for its members similar exemptions regarding statements of advice (SOAs) as those recently afforded to stockbrokers regarding time critical stock transactions.

In a submission to theAustralian Securities and Investments Commission(ASIC), the FPA has requested it use its discretionary powers under the Financial Services Reform Act (FSRA) to grant such exemptions.

“We’re putting a submission together for ASIC to highlight that there are circumstances in financial planning where the time critical exemptions given to brokers may also be extended to provide similar exemptions to financial planners in terms of issuing SOAs,” FPA manager policy and government relations Con Hristodoulidis says.

At the time of going to press, the submission was scheduled to be signed off earlier this week by FPA chief executive officer Kerrie Kelly, and is to be sent to ASIC despite the FPA hitting out in August with regard to the regulator’s discretionary powers under FSRA.

Hristodoulidis says the current set-up regarding SOAs runs the risk of clients being swamped with paper work, as under existing law if a client makes contact with a planner which involves consideration of their financial situation and advice is given, then an SOA has to be issued.

“We acknowledge that there needs to be some sort of paper trail but we don’t believe this means going to the extent of issuing a complete SOA every time a planner has contact with a client, as this will simply increase costs and is likely to lead to overkill,” Hristodoulidis says.

“We think file notes or an email may be appropriate in some circumstances, for instance if a client calls up worried about a glitch in the market and a planner reassures them this is all it is then the planner should not have to issue a complete SOA.”

The Boutique Financial Planning Principals Group (BFPPG) has also moved to tackle the issue and sent a letter to Parliamentary Secretary to the Treasurer Ross Cameron in December highlighting that many financial planners also deal heavily in listed securities on behalf of their clients and should therefore be given the same live market exemptions.

“In the interest of open and fair competition (for the benefit of consumers) it is important that there is a level playing field where stockbroker and financial planners are competing for the same client, “ the BFPPG says in its letter.