Stephen Jones (left) and Conexus Financial founder Colin Tate at the Quality of Advice Review breakfast in Sydney.

The Minister for Financial Services Stephen Jones has given his clearest indication the future of Statements of Advice is due for reform.  

Speaking at the first of three roadshow dates hosted by Professional Planner parent company of Conexus Financial in partnership with Allianz Retire+, the Minister said it’s not reasonable to expect consumers to engage with 100-page advice documents. 

“On this one it’s a bloody no-brainer,” Jones said. “That may have started with a good intention to ensure that consumers are protected, but are actually a risk mitigation device for the licensee and/or product manufacturers. They’re not doing what they’re intended to do.” 

However, Jones ruled out eliminating them outright. 

“It is important when somebody is sitting down with a financial planner and gets a piece of advice – comprehensive or otherwise – that they walk away with a bit of paper,” Jones said. 

“Even if we said they didn’t have to [give a document outlining the advice given] the overwhelming majority of licensees and financial planners would ensure they did.” 

Jones wouldn’t specify what the size of the ideal future SOA should look like, only that the current arrangement is not “fit for purpose”. 

“They’re churning up a lot of time and money, and consumers aren’t reading them or understanding them,” Jones said. 

The admission comes the week after five consumer groups sent a letter to the Minister stating they had softened their stance towards reforming SOAs and the safe harbour steps of the Best Interests Duty. 

“We would support reforms to facilitate the provision of shorter, more meaningful information by advisers to their clients,” the letter from Choice and four other consumer groups said. 

“We would however oppose the recommendation that advisers no longer be required to provide any record of advice to their clients.” 

In the interest of time 

Although the Minister made himself available to hear directly from the industry during the roadshow, the consultation on the final report of the Quality of Advice Review is yet to officially open via Treasury. 

Despite pressure from the room, the Minister remains uncommitted to a firm timeline of reforms, insisting the changes will first go through cabinet and then be introduced, where necessary, via legislation.