Julia Newbould (left), Michelle Levy, Matt Lawler and Sarah Abood

Quality of Advice Review lead Michelle Levy has acknowledged that the Minister for Financial Services’ preference to simplify Statements of Advice rather than remove them altogether is likely to generate a swifter result for the profession.

Levy had proposed removing the requirement for SOAs but the Minister, Stephen Jones, has hinted at setting up a regulatory environment where only shorter documents are required.

Speaking on a webinar hosted by Professional Planer in partnership with AMP on Monday morning, Levy said Jones’ proposal wouldn’t need legislative change.

“The kinds of things that could be done by regulation rather than legislation would be to remove some of the content requirements from an SOA, for example, but you couldn’t remove the requirement for an SOA,” Levy said.

“I look at the content requirements and they’re not substantial as it is, so I don’t think we can blame the content requirements for an SOA on the law itself.”

Financial Advisers Association chief executive Sarah Abood argued the removal of prescriptive SOAs needed a “radical re-think” and will be a non-controversial change.

“When I say that, there isn’t universal agreement across the industry on that, although the agreement in the profession is very strong,” she said.

AMP Advice managing director Matt Lawler said Levy’s proposal to remove SOAs was well liked because the lengthy advice document now had a “life of its own” and had become a compliance document rather than one that best served clients.

“I know there’s a lot of debate around this – that it’s the lawyers or licensees that make the SOA overcomplicated – but but there probably is an element of truth in that,” Lawler said.

“’Clear, concise and effective’ is what is required for disclosure to clients and you could argue SOAs are not that for clients.”

Asked how quickly AMP could simplify SOAs with or without legislative help, Lawler said there’s always talk between licensee heads about alternative ways to deliver advice and pointed to the FPA’s work on video SOAs.

“It’s still the law to do an SOA,” Lawler said, although different people will continue to have different interpretations about what should be included in the document.

Avoiding controversy

Abood said the priority for the association is gaining quick action on changes that aren’t “controversial”.