BT pushes for simplified SOAs for strategic advice


BT Financial Group has asked for reduced disclosure obligations for advisers providing strategic advice such as SMSF and pension advice.

In its submission to the advice quality review issues paper, BT Financial Group stated that the Corporations Act should be amended to allow advisors to provide advice separate from product execution advice.

The submission explained that the personal advice process has two distinct components: strategic advice and product execution advice.

Currently, both elements are contained in the Statement of Advice (SoA), which adds to its length and complexity, he noted.

“In many cases, we believe that advisors would like to provide and consumers would like to receive strategic advice separate from product execution advice, but the current regulatory regime makes this difficult to achieve because the strategic advice component may contain recommendations for product categories such as Superannuation, SMSF or Australian Equity,” BT explained in the submission.

“While a specific product may not be mentioned, the reference to different product categories, superannuation contributions, etc. has led to the view that this form of advice can only be presented in an advice statement.”

This requires the inclusion of all current disclosures and disclaimers that are included in an SoA, adding length to the document, even if no end product is recommended, the submission states.

Although BT has stated that it does not believe that strategic advice should be provided outside of the existing AFSL regime, strategic advice that does not contain any specific product recommendation should be able to be provided in a less structured and regulated format than SOA existing.

“In the absence of product recommendations, it should arguably be easier for an advisor to charge for strategy advice separately,” he said.

“For customers who are only looking for strategic advice, this should be less expensive than advice from a full SoA with product recommendations. The level of disclosure required should be reduced.

BT said it would support advisers given the choice in this regard, to provide advice tailored to the needs of their clients.

“If advisors wish to continue to provide their advice in the single document (such as the current SoA) that covers both policy and product recommendations, they should be free to do so,” the submission added.

“However, for advisers who wish to separate the two elements and provide them separately, the law should be changed to facilitate this in a clear and effective way that remains client-centric.

If the adviser then proceeds to provide advice on product execution after providing strategic advice, this could be done in a separate document that looks more like an advice statement or possibly an advice record, he said. he declares.

“References could be made to the strategic advice document, without the need to reproduce the information. There would be no need to restate the client’s existing position or strategic recommendations,” he explained.

“As a result, this document should be faster and cheaper to produce, and much shorter, which helps make the advice more affordable and accessible, but without reducing the quality.”

The submission indicates that there is a risk that clients will seek strategic advice and, once provided, seek to undertake the realization of the end product themselves, particularly given advances in technology enabling clients to undertake more transactions personally.

“While we don’t support this approach and believe the advisor is in the best position to help, it should ultimately be a decision for the client,” he said.

Miranda Brownlee

Miranda Brownlee is the Deputy Editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF industry.

Since joining the team in 2014, Miranda has been responsible for breaking some of Australia’s biggest superannuation stories and has reported extensively on technical strategy and legislative updates.
Miranda also has extensive experience in business and financial services reporting, having written for titles such as Investor Daily, ifa and Accountants Daily.

BT pushes for simplified SOAs for strategic advice

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Last update: July 07, 2022

Posted: July 08, 2022


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