Extend SOA relief to all single-issue advice: FSC

In its recent report, Accelerating Australia’s Economic Recovery, the FSC recommended the government implement a two-year temporary reform to allow the use of an ROA rather than SOA if consumers were seeking advice on specific financial issues.

“Scaled advice would be documented through a record of advice and allow a client to seek advice on a specific subject, such as the impact of a redundancy or a hardship withdrawal from superannuation,” the report stated.

The FSC said the proposal could build on initial relief provided to advisers in order to facilitate low-cost advice for consumers around whether they should access their super early under the government’s COVID-19 hardship scheme.

The council said the government could look to monitor the effectiveness of the reform by conducting a review midway through the two-year relief period.

“The advice provided under this program would also continue to broadly operate within the established best interest duty and be free from conflicted remuneration, which would continue to be prohibited,” the FSC said.

The FSC said improved ability for financial planners to provide scaled advice would have “economic and social benefits”, including consumers making improved financial decisions that could help get them on their feet quicker following the crisis, and reduced likelihood of such individuals being targeted by investment scammers.

The council also said better access to single-issue advice would reduce pressure on financial counsellors and the non-profit sector during the coming recession, freeing them up to focus on individuals with greater need.