Holding the Labor Government to its promise of slashing red tape is top of the FPA’s agenda, its chief executive Jo-Anne Bloch has announced.
The industry body has created a short-form statement of advice (SOA), which it will present to Labor’s new financial services minister Lindsay Tanner as a matter of urgency.
“The one thing that I have come to understand in my last 18 months with the FPA is . . . that you [FPA members] are completely and utterly frustrated with the requirements of the statement of advice,” Bloch told the FPA 2007 National Conference yesterday.
Its eight-page SOA is written in plain English and is compliant. It sets out the basis for the advice, cost of advice, factors affecting advice and the risks and disadvantages of the advice, she said.
Practitioners who created the short-form SOA claim it will knock 50 per cent off the cost of preparing an SOA and take half the time to produce.
The FPA is already talking to ASIC about it and will test it with consumers.
The industry body wants the Association of Super Funds of Australia, the Investment and Financial Services Association, Choice, the Financial Industry Complaints Service and licensees to come on board.
Also on Bloch’s hit list are low cost advice and remuneration, commissions and conflicts of interest.
Bloch presented five solutions to deliver targeted advice at an affordable price.
They were: creating a category called single-issue, or basic advice, short form disclosure, training more people to provide general advice, introducing better payment options and improved delivery options, for example online.
The FPA chief wants to introduce an advice-based fee, which is a percentage or dollar amount separated from any product fee.
“We need to take our conflict of interest principles one step further and insist that remuneration for advice and product can no longer be bundled, even if remuneration is commission-based,” she said.
