ASIC's call to treat scaled advice no differently to that of holistic advice has raised more questions than answers surrounding its implementation, industry participants said.
A number of participants told InvestorDaily they either support the corporate regulator's call or believe changes are necessary in order to keep a level playing field for scaled advice, particularly in and outside superannuation.
ASIC is working to provide examples of scaled advice in its formal guidelines, though a release date is yet to be confirmed.
FPA chief executive Mark Rantall said there was no argument over the Future of Financial Advice best interest requirement being applicable to scaled advice however, what is now necessary is regulatory guidance to determine the level of interrogation required of an adviser.
"ASIC will need to turn its attention to regulatory guidance around how scaled advice might work," Rantall said.
"What we're really interested in now is to see that regulatory guidance to understand how best interest and scaled advice intersect and how a financial planner can give scaled advice with confidence, without breaching any of their requirements under best interest."
The FPA is continuing to seek clarity on the extent of the financial planner's responsibilities when providing scaled advice.
SFG Australia managing director Tony Fenning said the industry has been led to believe that there would be a separate treatment of scaled advice that was comparable to the treatment afforded to the industry super funds and superannuation trustees for internal advice relating to superannuation.
"We thought it was an important part of the policy so that there was no lack of a level playing field with industry funds," Fenning said.
"It both surprises and disappoints me if that's now not going to occur."
Legislation has already provided industry super funds with some exclusion from the same requirements and liabilities associated with giving simple advice, Fenning said.
"The industry super funds and the superannuation funds are allowed to assume various [client factors] under the scaled-down advice they give, so if you were outside that environment you would think you would have the ability to provide that same service," he said.
"That seems to be the missing plank."
There is still a question mark over the delivery of scaled advice, notably where the duty to enquire starts and stops, Fenning said.
ASIC's previous guideline examples around the deployment of full advice in a simple way had not proved to be practical, Fenning said.
WLM Financial Services director Matthew Walker said scaled advice should not be watered down nor be subject to softer rules, otherwise it will diminish the obligation of advisers.
"I agree with ASIC. The obligations of best interest and looking after a client properly don't diminish because they've got less money," Walker said.
"Scaled advice doesn't have to be subject to any different class of advice at all. It's no different to any form of advice in our opinion.
"I'm astounded that people would suggest there should be different rules around it. It's still a person's financial affairs so it should be in the same playing field as everyone else."
A divided approach to holistic and scaled advice will lead to confusion for the industry and puts scaled advice clients in danger, Walker said.
My Adviser managing director Philippa Sheehan also agrees with ASIC's call.
"I am very supportive of ASIC's decision that scaled advice equals personal advice," Sheehan said.
"It's no different to what we have today. If a client says, 'I only want you to look at my insurance' and despite the adviser making reasonable attempts to advise them in other areas, then the adviser will only provide insurance advice."
On the contrary, the issue of industry funds being treated favourably has been disappointing, Sheehan said.
AMP Financial Services told InvestorDaily it would reserve its comments until the official release of scaled advice examples by ASIC.
