FSRA – it’s all just an Act
Well, just when you thought you had the system licked, they change it.
Hail to theFinancial SharkRepellent Act. Yes, the FSRA, here to bite you on the bum like a big Great White if you mess up and guaranteed to keep the shonkies out of the business.
As a small dealer, I must confess to being a tad confused over some of the terminology and how it is all supposed to work.
A while ago, the industry produced anAdviser ServicesGuide(ASG) that was most useful. In it, I explained what I could do. I had no problem with the layout of the thing and guess that it told everyone all the important things.
Nonetheless, I still think they should have requirements that allow you to inject a little personality into the thing. What kind of music do you like, are you a gambler, have you ever been involved in the occult?
There should be a spot that tells the potential client what you do on weekends. I would be able to talk about parties. I could put in some of my favourite party tricks — like a demonstration of the thermal energy contained in a single Cheezel. Have you ever lit one of these buggers? Break out the fire extinguishers boys and girls, these things go off!
What about sticking a whole egg in a 700 watt microwave for six minutes on high after having 12 Crownies?
Forget your West Australian fireworks magazine going up, expect a Nagasaki-like explosion with the inside of the microwave covered in subatomic egg dust. After the 13th Crownie, we called it ‘fowl-out’ — it was extremely funny at the time.
No, my ASG contained stuff about giving advice on investments, helping them with their finances and the usual stuff.
The point is, the bloody ASG has moved right up to the FSG. Whatever happened to B,C,D and ESGs?
Like software revisions, I figure it indicates the release version.A Services Guidewas the first one (ASG). Then, having been a little jacked off that things weren’t quite right, the boys and girls in ASIC followed the bosses orders and brought out theBloody Services Guide. Having done this as a bit of a rush job, pay back time to the head honchos was with theCrappyone, followed by the one introduced in an era of tax effectives, theDodgy. Then in an era of reform under CLERP 6 theEvolving ServicesGuideand now we have the FSG. I have no idea what the F could mean.
The other area of some concern relates to cash-flow. This is a whole new concept to me. The only thing that flows around here has nothing to do with cash and if it did, I can tell you it would only be in one direction, down. The new Act requires me to produce projections three months in advance and prove that I can pay my debts.
In WA, we have a unique system of debt management. Developed over the past few years, it involves a debt collection agency known around town as the Mongrel Bastards. Zipping about the place on sporty little motorcycles, their system is very effective. If you don’t pay your debt, you lose the use of your right arm for a couple of months.
I’m hoping that ASIC will accept a photo of me with my arms unencumbered by plaster casts as proof that I can pay my debts.
There were some things that have been missed. There should be a specific exemption in the legislation for you to be able to sledge your competition.
There’s nothing quite like a client wandering about kicking tyres to see if you’re any good. Forget what you do (it’s in the FSG anyway), you should be able to spend the first hour, without obligation, dumping on the bloke down the road.
It could be subtle:
“It’s great to see so many new people coming into the business . . .”
“Ah Mary, I bought my first car from her, an old Vee Dub with a three-month warranty . . .”
You can crank it up a little with:
“So, the treatment’s been a success, it’s good to hear . . .”
Or even:
“Ooh, you’ve seen Steve? He’s famous you know, we’ve been studying him in our ethics and compliance course ...”
What about fund managers being forced not to tell pork pies or conveniently miss out important details? Now there’s a turn up. David Knott would be a tad busy if my experience is anything to go by.
“Turn around time is five working days” — said by Tony at Fund Manager X, who job shares with Dan and Trish and is thus only there two days in every nine.
“We are rationalising our distribution system” — everyone you knew is getting sacked.
“We are re-positioning our portfolio” — there’s no cash flow in, so everything’s being liquidated faster than an ice block on fire.
“You’re the next in line” — if you’re just about there, we’re going to cut you off.
“Special Adviser Line” — what we tell them it is but really isn’t, we just answer it differently.
The consumer stuff is good too, although some of the phrasing leaves a little to be desired. Like the cooling off period of 14 days on a funeral bond fund?
Now call me a tad odd, as I’m sure most of you will, but why did it take so long for the Brits to pay their farewells to the Queen Mum.
My theory is this. I reckon The Queen Mum’s done the deal with a pre-paid funeral fund without telling anyone. She’s passed away, the family’s found out, they’re waiting for the cool off period to run out — they get the money back and book the whole lot up to the company. I would, told you I’m odd!
AUTHOR
Jason Spits
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