“I am actually really pleased with the direction the FPA is going in with relation to scaled advice, and in particular, the concept of staged advice. This is something that MyAdviser representatives have been doing for a while now, so I’m really excited,” Ms Sheehan said.
She explained that the consultation paper discusses what MyAdviser has been promoting for the past two years: the objective of the client, what strategy is used, and identifying that product is not a strategy in its own right.
“So I think from an industry perspective, this consultation paper is a huge step forward and exactly where we need to be in a year from now,” Ms Sheehan said.
“It was not at all [as expected]. I expected something that was going to be another layer of cumbersome requirements to Future of Financial Advice (FOFA).
“What I’ve actually found is this consultation paper, and what the FPA are proposing, is very reasonable to be able to administer from a licensee perspective, an adviser perspective, and ultimately the client’s perspective,” she said.
Going forward, and on the countdown to FOFA implementation next year, she said that it is important the industry works closely with the FPA to ensure advisers meet all requirements.
“I think the next step is to really jump feet first. In January we have six months to pick up and really roll out this staged advice concept,” Ms Sheehan said.
“I don’t think it’s cumbersome, but there are going to need to be some changes to adviser procedures in their offices and things like financial services guides and advice templates,” she said.
The proposed revisions, announced in October, were an effort to evolve the professional standards of members in line with FOFA reforms and the Australian Securities and Investments Commission’s (ASIC’s) Consultation Paper 191, Future of Financial Advice: Approval of codes of conduct for exemption from opt-in requirement (CP191).
But at the time, MyAdviser managing director Philippa Sheehan said she was concerned the regulator’s paper will have the adverse outcome of creating a monopoly out of the two main industry associations.
“If we accept CP 191 as it currently is, we’re going to end up with a monopoly of two main associations, where we’re going to have to pick sides,” Ms Sheehan said at the time.
“CP 191 is going to make me pick, but I think they both have their merits. It’s going to be no different to dealing with a Woolworth and Coles, and as advisers move from one licensee to another, checking the new code they’ll be operating under will be an [added] step.”
ASIC should be working on CP 191 with a view to licensees having their own codes and the industry associations should develop guides for creating or improving codes for licensees, she said.
