AIOFP proposes compliance fix, seeks ‘reasonable’ adjustments

According to Peter Johnston, the executive director of the Association of Independently Owned Financial Professionals, “fair and reasonable adjustments” to relevant legislation are necessary to ease the burden on advisers.

“Politicians and ASIC need to understand that the advice community wants the ‘bad eggs’ removed more than anyone else and we will not protect them,” Mr Johnston said in a recent email.

“It is fruitless having a panel of academics who have not worked in our industry making critical decisions that [impact] on the practically of the industry and therefore the cost of advice to consumers.”

His solution is the creation of a panel of experienced advisers in conjunction with ASIC, which would meet on a regular basis to rejig the compliance regime.

One of the key issues the panel would tackle is statements of advice (SOA), Mr Johnston said.

“We badly need direction from ASIC on the composition SOA’s, that is the most vexed question in the industry,” Mr Johnston said.

“Currently we have a compliance regime dominated by lawyers creating 100 + page documents that clients seldom read and will more than likely not stand up in AFCA if problems occur.

“The Corporations Law states that an SOA must be concise and understandable, it is about time all stakeholders paid attention to the requirements of the law.”

Mr Johnston is confident that once this matter is addressed, along with other duplicated and impractical requirements, the cost of advice would drop by at least 50 per cent.

“That is good consumer policy,” Mr Johnston said.