Scaled advice paper '90% there': Sheehan
The Australian Securities and Investments Commission (ASIC)'s recently-released consultation paper (CP) covering scaled advice does a fantastic job of clearing up many grey areas but still leaves one significant gap, according to MyAdviser managing director Philippa Sheehan.
'CP 183: Giving information, general advice and scaled advice' does a much better job than the July 2011 'CP 164: Additional guidance on how to scale advice', and provides great examples for call centres, accountants and financial planners on how scaled advice will fit into industry, Sheehan said.
However, what is still not clear under section 67 (which states an Australian financial services licensee can provide scaled advice to existing, new and potential clients if they have multiple authorisations of their license for financial products) is where scaled advice would then become full advice, Sheehan said.
If the same client came in on separate occasions and received scaled advice (from the same adviser) on insurance, then on superannuation, then on tax - with the information the adviser then has about the client, they could have received full advice.
"And that concerns me," Sheehan said.
"ASIC has done a great job of clearing up a lot of greyness in our industry with this paper, but we need further clarification of when an adviser or licensee should change scaled advice to full advice," she said.
"How many times do clients need to get scaled advice over how many issues before it becomes full advice?"
The paper did a good job of outlining how a limited fact find might work, and it is now the licensee's job to come up with a fact find that is flexible enough to work for both scaled and full advice clients based on all the examples in the paper, Sheehan added.
AUTHOR
Staff Writer
Recommended for you
Sequoia Financial Group has announced it is selling off its Informed Investor subsidiary which it acquired in April 2022.
Wealth Data has examined which advice business model has seen the most growth since the start of the year including those that offer holistic advice.
Research conducted by Elixir Consulting and Lonsec has quantified the efficiency gains of using managed accounts in financial advice practices in hours per week saved.
With only one-quarter of advice practices actively seeking feedback from clients, the Financial Advice Association Australia has emphasised why this is a critical tool for client retention.
