The Financial Planning Association of Australia The Financial Planning Association of Australia

FPA submission recommends further amendments to ASIC’s new example SOA

The Financial Planning Association of Australia (FPA) has submitted recommendations to ASIC to further amend Consultation Paper 284, prior to it being used as a model for a new Statement of Advice (SOA) for the financial planning industry.

The FPA supports ASIC’s initiative to develop a new example SOA template through consultation with the financial planning profession. While significant improvements have been made to the latest example SOA in terms of usability, the FPA has identified some areas that require further consideration and has put forward a number of recommendations.

Ben Marshan, Head of Policy and Government Relations at the FPA, said that the example SOA is a leap forward from the previous example SOAs provided by ASIC, but there is more that can be done to improve the customer experience.

“The presentation of information is clearer now than in previous SOAs. However, there are a number of changes that would further improve this example SOA. We suggest the use of icons, symbols, graphics, audio and video in the sample would create a more engaging delivery of information to consumers.

“As smartphone and tablet use make up 63%[1] of total time spent on devices in Australia, ASIC should further consider how it can encourage the digital delivery of advice using mobile technology.”

The FPA is very supportive of improved remuneration disclosure and believes the SOA should demonstrate the value of the advice being provided to the client, then outline the costs and what the adviser is paid.

“We do not think it is appropriate for the SOA to begin with fees and remuneration disclosures,” said Mr Marshan. “We led with the FPA Remuneration Policy in 2012 to improve remuneration disclosure and we recommend ASIC consider the ideas our members came up with in this Policy rather than the front cover disclosure ASIC has chosen to lead with.”

Mr Marshan concluded: “While a SOA is a disclosure document and not the client’s financial plan, it should still be aspirational. It should help demonstrate the professional diagnosis process a professional financial planner undertakes, and how it will help the client achieve a better financial position through an implemented financial plan.”