The corporate regulator has decided the advice ecosystem has recovered sufficiently from the pandemic and will allow temporary allowances for Statement of Advice relief to lapse on April 15.
ASIC sent a notice Thursday advising that the relief measure – introduced on 15 April, 2020 for a one year period before being extended for two further 6 months periods – is no longer required due to an easing of pandemic related conditions.
“ASIC undertook targeted industry consultation to better understand the effects of our approach,” the regulator stated in a media release.
“Based on feedback, we do not consider that the current status of COVID-19 responses in Australia provides a sufficient basis for a decision by ASIC to further extend the relief provided by the COVID-19 Instrument.”
The ‘Situations in which Statement of Advice is not required’ relief, as it was dubbed, allows advisers to provide a Record of Advice rather than a full SoA to existing clients who require financial advice specifically due to the effects of the pandemic.
The parameters of relief are quite targeted; according to the legislative instrument the adviser must confirm that the advice is “required because of the adverse economic effects of the coronavirus known as COVID‑19”, and that the client has previously received an SoA.
As part of the allowance, ASIC also introduced a relief measure allowing advisers more time to give their clients an SoA after time-critical advice has been provided. Instead of the usual five days, advisers receive 20 days to produce an SoA.
In April last year ASIC signalled that it was looking for more ways to embed RoAs into the advice process in favour of SoAs.
“SOAs are a clear cost barrier to providing limited advice,” ASIC stated after going through the 469 submissions it received – 244 from financial advisers – in a consultation paper (CP 322).
“Respondents have raised that government should reconsider the SoA requirements and expand the situations when an RoA is permissible instead of an SoA.”