Phil Anderson (left), Conrad Travers and Shail Singh

Whether an SOA will be required to be 100-plus pages, 10 pages or even non-existent, AFCA remains focused on how the advice was given.

Quality of Advice Review lead Michelle Levy recommended scrapping SOAs, but during the Professional Planner QAR Roadshow, Minister for Financial Services Stephen Jones only showed support for shortened versions of the advice document rather than complete obliteration.

AFCA lead ombudsman for advice Shail Singh said SOAs are important, but the 120-page versions can make it hard to understand what the advice was.

“The SOA is important, but the SOA done properly is important,” Singh said at the inaugural roadshow for the Financial Advice Association in Sydney on Monday.

If the QAR proposal is legislated, Singh said it will be “interesting” to see how the profession responds to it.

“If the dispute goes to AFCA, we’re going to have to understand what was said to the consumer and what they understood about that particular advice,” Singh said.

Tangelo Advice Consulting principal consultant Conrad Travers predicted licensees would adapt and lift the supervision and monitoring frameworks in place to make sure the advice being given is clear.

“I would recommend for new clients, even if they don’t ask for it, to give them a simple summary of the advice,” Travers said.

“That could be five pages and make the advice really clear – what are you recommending and what are the next steps to the client. Beneath that, cover off the additional scenarios that you might have considered just in summary format, then the risks and the fees. If you do that, that’s best interest.”

The Minister’s response to the QAR is expected before the Professional Planner Licensee Summit in June, where Singh will again engage licensee heads on similar topics.

Safe Harbour

Jones – with support from the consumer groups – has been open to eliminating safe harbour, with the Minister suggesting it will go.

While Jones was against doing so in the lead up the election, he has since been swayed on the issue, explaining at the QAR Roadshow he took on feedback from the advice profession that the regime wasn’t offering any regulatory protection for advisers.

Travers referred back to ASIC’s Report 515, the 2017 review of how licensees oversaw their advisers which he attributed to as strong evidence why the lawmakers felt more prescriptive oversight was needed.