Financial planners and dealer group chiefs have seized on the eight-page statement of advice (SOA) idea mooted by the FPA to slash red tape, disclosure and costs.
The plain English short-form SOA knocks 50 per cent off the cost of preparation and slashes production time by half, FPA chief executive Jo-Anne Bloch told delegates at the FPA 2007 National Conference.
The industry body will hold the new Federal Government to its pledge of slashing red tape and will urgently present the short-form SOA to Financial Services minister Lindsay Tanner.
"Reducing the size of SOAs is a fantastic goal for the FPA to pursue as it's critical to improving transparency and client understanding," MLC Advice Solutions general manager Greg Miller told InvestorDaily.
"As an industry we need to get much better at putting the end customer at the centre of our processes and communicating the advice strategy in a clear and simple way."
Australian Financial Services Group head of strategic development Dani Peer said an inch-thick SOA was a response to the punishment of non-compliance with the Financial Services Reform Act.
"As long as we keep mixing compliance with advice, the purpose of the document, and therefore the format, will always be subject to a tug-of-war between substance and form," Peer said.
He suggested splitting an SOA into a disclosure piece and an advice piece. The disclosure could then become an industry-wide format.
Capstone Financial Planning managing director Grant O'Riley said the group would consider incorporating some of the ideas into its templates after receiving feedback from its advisers.
"The eight-page SOA is a good option for your average client with a limited need, although we still have the need for a more in-depth SOA for more complex client situations," O'Riley said.
Infocus Money Management managing director Darren Steinhardt agreed and added SOA quality was the issue, not size.
Bloch said FPA members were "completely and utterly frustrated with the requirements of the SOA".
"An eight page SOA is all we need as advisers to communicate the key messages," Financial Design for Life principal and financial adviser Chris Browne said.
"Moreover, because it will take less time to prepare, we will be able to deliver the advice to more people at lower price.
I believe the existing formats have forgotten about the end reader. They are more focused about the legalities concerning our advice -protecting our arse," Browne told IFA.
