FSC and FPA coordinating on fee disclosure approach
The Financial Planning Association (FPA) and the Financial Services Council (FSC) have been working together on a common approach to fee disclosure documentation.
The combined effort has been confirmed by the FSC which has told member organisations that it has been working with the FPA to “generate a set of requirements that should support an industry standard form”.
In an article published to FSC members, the organisation’s Zach Castles said that the aim was to ensure consensus in the area of regulation.
“The FSC knows that the Fee Disclosure Statement and Opt-In requirements when combined with new advice fee consent documents and independence disclosure will result in a large and complex table of numbers that will be difficult for consumers to comprehend. Availability of information is not a good indicator of whether that information is understood.”
“The solution to this complexity will not come from regulators but through leadership by industry through bodies such as the FSC and FPA. The FSC hopes this is just the start to effective industry coordination.”
“Subject to legal review and implementation by FSC’s members we will look to codify this as standard industry guidance. The effectiveness of the guidance will depend on how broadly it is accepted by the industry, including by financial advisers themselves.”
“The FSC is strongly of the view, however, that a consistent approach is a better outcome than the prospect of a variety of different forms requiring different levels of scrutiny from the regulator which will drive up cost.”
“This approach is consistent with the FSC’s broader industry leadership in the recent release of our Green Paper on Financial Advice. The FSC is looking for practical solutions to reduce the regulatory burden on the advice industry that is shared by advisers and licensees.”