The Financial Planning Association of Australia (FPA) has urged the government to avoid legislation as it moves to cut red tape around financial services advice and disclosure.
Superannuation Minister Nick Sherry and finance minister Lindsay Tanner announced in February that a new financial services working group would seek ways to shorten financial product disclosure documents in superannuation and improve access to cost-effective advice.
FPA chief executive officer Jo-Anne Bloch says lengthy disclosure documents have increased the cost and complexity of providing advice. The association plans to take its eight-page Statement of Advice (SOA) to the working group for consideration.
“There’s a fear that whilst we absolutely want short-form disclosure and greater certainty, we also don’t want a legislated result,” she says.
“It’s a document between a client and an adviser and that is personal and specific and we’re not sure that a legislative template or framework is a solution.”
The working group will consist of senior officers from Treasury, ASIC and the department of finance and deregulation. It is the first instalment of the Rudd government’s deregulation agenda.
“Complex and lengthy documents, often between 50 and 100 pages, are unreadable to most people,” Sherry says.
“One of the key priorities for the government in this context is to develop clear and understandable disclosure documents.”
The Investment and Financial Services Association (IFSA) welcomed any measures that will improve comprehension, comparability and access to more cost-effective advice.
“Unscrambling the disclosure omelette will not be without its difficulties, but we believe that a balance can be struck between document length, consumer protection and red-tape reduction for industry,” says Richard Gilbert, IFSA CEO.
“Consumers will be the ultimate winners with shorter disclosure documents – particularly when delivered electronically – as they will help to reduce administration costs.”
The group will carry out its work with industry and consumer groups and is encouraging stakeholders to get involved.
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